How SWIFT gpi reduces cross-border payment times to minutes, even seconds?
SWIFT has launched its global payments innovation (gpi) initiative in 2017 and since then almost 60% of all cross-border money transfers on SWIFT are sent via SWIFT gpi. The payments industry showed great interest in the advantages gpi offered in terms of pace, transparency, traceability, and accuracy of data. Currently, over 3,500 financial institutions (FIs) are using gpi and the global adoption rate is increasing each day. SWIFT gpi aims to ensure fast and seamless end-to-end transactions in real-time across the globe both for the payments and securities processes.
Aspects of SWIFT gpi that enhance traditional cross–border payments
One of the outstanding advantages of SWIFT gpi payments is speed. 92% of end-to-end cross-border payments are completed within 24 hours while 40% of them are credited within only 30 minutes. The rate got improved in the case of mature markets that are not subjected to currency or compliance checks and the pace of the transactions is as fast as the domestic payments among those markets. For instance, when the payment travels between the UK and the US, the time-lapse is 30 minutes for 72% of payments and 6 hours for 95%.
Transparency, Traceability, and Predictability
SWIFT gpi provides full visibility of the transaction fees without any data getting lost which helps banks and other financial institut ions achieve transparent, traceable, and predictable end-to-end transaction monitoring. The overall reconciliation and cash management can be improved with gpi’s end-to-end tracking and confirmation system. In addition to its importance and popularity in cross-border payments, SWIFT gpi’s transparency and payments confirmation system has become a preferred method for domestic and lower-value payments as well.
By increasing the transparency of the transaction fees and exchange rates and by offering an end-to-end real-time tracking of the payment status, SWIFT gpi enhances the overall quality of the payments experience and diminishes the friction in the cross-border and domestic payments.
Another feature of SWIFT gpi that brings extra value to the cross-border payment processes is acertainty. The data belonging to the specific payment never gets lost or changed throughout the whole transaction chain. Eventually, the reconciliation of payment can be completed in a faster and more accurate way, ensuring no information is missing, preventing extra processing and creating better customer satisfaction.
How will the industry players benefit from the SWIFT gpi capabilities?
It is undeniable that SWIFT gpi has benefitted the whole payments industry by making the transaction process more frictionless, reducing the costs, improving transparency and end-to-end monitoring. Different industry players focused on different features of the gpi and enhanced their businesses.
Benefits for the banks
- Reduced costs up to 50% with less need for inter-bank communication and administrative intervention
- Improved customer experience by providing real-time tracking of payments, higher visibility in fees and timing
- Seamless cross-border payments experience
- Optimized cash management with higher predictability and transparency
- Enhancement in overall business with the possibility to improve banks’ services in addition to gpi.
Benefits for the corporates
- Increased speed in payment for the international commodities and services
- Shortened supply circulation and reduced exposure to exchange rate risks
- Improved liquidity and treasury management with the real-time and end-to-end tracking of cross-border payments
Benefits for Market Infrastructures (MIs)
- Support the members that adopted SWIFT gpi with improved cross-border experience and deliver real value to their businesses
- Expand the gpi benefits to domestic banks and increase the number of channels in which gpi payments can be used by creating an easy and frictionless gpi payments process in between cross-border and local markets.
End-to-end tracking to improve cross-border payments
Unique End-To-End Transaction Reference (UETR) is a fundamental component of SWIFT gpi. UETR is the key indicator for each payment transaction that travels along the whole payment route and reaches the receiver’s bank. The difference of UETR from traditional payment tracking lies in the fact that UETR provides end-to-end and real-time transaction monitoring while the latter can only offer the correlation of the messages. The effective use of UETR ensures an enhancement in cross-border transactions in a considerable amount by increasing the speed and predictability of the delivery of resources. UETR also encourages international trade and global transfers of capital.
Choosing the right vendor for implementing gpi
70% of banks in the world get the support of third-party vendors and their products to make sure that they deliver the best and most satisfying services to their customers. Payment application vendors play a vital role in the adoption of SWIFT gpi because they can transform corporate payment requests of corporates into gpi payments. They are also prominent in combining the requirements and logic of SWIFT gpi and Service-Level Agreement (SLA) for the effective transaction.
SWIFT has created a gpi rule book and a gpi Vendor Certification Programme for the vendors to comply with and prove to their customers that their payment applications are gpi-ready.
Fineksus is ready for SWIFT gpi. With the adoption of SWIFT gpi capabilities into its financial messaging products, Fineksus offers improved speed, transparency, and end-to-end monitoring in international payments. The overall operational efficiency increased and cost-based optimization is achieved with the addition of SWIFT gpi.
Our SWIFT gpi compliant financial messaging solutions are:
- PayGate™ Maestro: Advanced financial messaging management hub powered by flexible Business Rule Engine that enables SWIFT gpi payment messages and provides tracking the status of the messages via its built-in gpi tracker screen.
- PayGate™ Search: Financial message archiving and reporting tool that stores financial messages in a central repository and enables searching, displaying, and advanced reporting functions among live messages and imported archives.
Our business partners have evolved their payment-related services by entering the advantageous and fast-growing SWIFT gpi community together with the PayGate™ solutions we offer.
Gökçe Gence, Head of Solution & Project