13. Unlucky for some. Not for TIPS FAST… TFG’s Ross McKenzie spoke to SWIFT’s Fabien Depasse, head of gpi Customer Success at SWIFT about the benefit of payment confirmations and universal confirmations between beneficiaries.
Ross McKenzie: Thanks for speaking to me! Can you give me a quick introduction to yourself?
Fabien Depasse: I am Fabien Depasse, Head of gpi Customer Success at SWIFT. My team’s role is to work closely with banks, market infrastructures, corporates and partners to make sure the whole ecosystem can reap the benefits of gpi and payment confirmations.
What are payment confirmations?
RM: What are payment confirmations?
FD: In simple terms, payment confirmations are similar to the tick received when messaging a friend or the email notification from a courier that a parcel has arrived. They confirm to an institution sending a payment that it has reached the beneficiary.
Payment confirmations and SWIFT
RM: What is SWIFT doing in the payment confirmations space?
FD: We believe that tracking and confirming payments in real-time is fundamental for modern commerce, and we have launched a number of services and features toward that end.
The launch of SWIFT gpi in 2017 marked the first step in this journey. The service includes the gpi Tracker, which provides end-to-end tracking of each gpi payment in real time along with fast processing and fee and forex transparency.
A tag, called the Unique End-to-End Transaction Reference (UETR), is embedded in all gpi payments and powers the gpi Tracker. In 2018, we introduced the (UETR) for all payments made on SWIFT. In a nutshell, this means that 100% of SWIFT payments are able to be tracked end-to-end.
In November 2019, we created the Basic Tracker. It enables all institutions – even those not yet on SWIFT gpi — to trace and confirm their SWIFT payment instructions and have visibility over their payment activity.
The next big step happens at the end of 2020. All financial institutions will be required to send a confirmation when a payment has been credited to an end beneficiary. This will provide all SWIFT customers end-to-end tracking, quickly and efficiently – bringing greater transparency and cost reduction.
RM: Why is SWIFT making payment confirmations mandatory?
FD: Banks often have to handle multiple queries on the status of payments, creating frustrations for their customers and adding cost. It also has a knock on effect of straining the relationship between a buyer and seller when there is a problem with a payment.
Businesses depend on knowing that a payment has arrived as an integral part of their supply chain. Without this step, trade can be impacted and goods and services end up delayed.
Confirmations enable banks to provide an improved customer experience by offering transparency and certainty that the funds have reached their destination. They also allow the creation of new value-added services.
RM: Who benefits from universal confirmations?
FD: Universal confirmations benefit banks and their end customers as well. Banks experience cost reduction and increased efficiency stemming from the reduction of effort required to resolve exceptions and investigations. End customers benefit from greater visibility and certainty in terms of the status of transactions and customer service. In fact, many banks have already built innovative services based on confirmations for their customers.
SWIFT gpi in 2020
RM: What are you most excited about for 2020?
FD: In addition to the benefits of universal confirmations, I think, in a more general sense, the growth in the use of gpi is exciting. In 2019, nearly $77 trillion in cross-border payments were transferred via SWIFT gpi, almost double the $40 trillion sent by SWIFT members in 2018. Almost two-thirds, or 65%, of cross-border and intergroup payments were sent using gpi and the number of country corridors nearly doubled to 1,939 in 2019.
Take up among corporates has been a particular highlight. This was boosted by the launch of gpi for corporates in 2019. Instead of having to log into many different portals for each of their banking partners to consult payments progress and details, corporates with multiple banking partners can now see all of this information directly in their own payments application. Over 50 of the world’s largest banks and corporates have already signed up to the service, and its next iteration is in pilot now.
We continue to work together with our community to extend the coverage of gpi and increase its value even more. SWIFT is driving the introduction of new functionalities on top of gpi to make real-time, 24/7 cross-border payments as seamless, convenient, cost-efficient and accessible as domestic payments. For example, at the end of last year we introduced a case resolution function, which enables banks to improve their customers’ experience for enquiries and investigations related to gpi payments. Pre-validation is a service we are currently piloting. It enables banks to find and resolve errors that cause delays before payment messages are sent, so they can be corrected.
Late last year, we also announced a new service to connect SWIFT gpi with domestic instant payments systems around the world to deliver global real-time payments. Through a combination of gpi and domestic real-time payments networks, SWIFT, together with gpi banks, will facilitate real-time international payments, while also ensuring ubiquitous availability of real-time cross-border payments globally. We’ve already trialled this with a number of domestic payment systems such as Australia’s New Payments Platform, TIPS in Europe and Singapore’s FAST which saw payments settle in seconds – the fastest in just 13 seconds.