EBA Clearing, SWIFT and The Clearing House test cross-border payments


Created: May 6th 2022

Cross-border real-time payments are the new frontier that major payment infrastructure companies are embarking on to improve efficiency in payments space reduce friction.

In such, EBA Clearing, SWIFT and The Clearing House have announced that it has planned to launch a pilot service for immediate cross-border (IXB) payments with the support of banks from both the US and Europe.

This pilot service is scheduled to be launched by the end of this year with the participants joining in a phased manner and has been designed with the 24 financial institutions, some of which are also in the pilot program.

The three infrastructure providers which are owned by member banks have been developing the pilot program as part of the IXB initiative which would improve the cross-border payments “by utilizing the fastest domestic payment options. It follows a proof of concept completed in October 2021, with the contribution of seven financial institutions”.

The move follows the announcement, back in October 2021, the three entities had partnered for cross-border payments.

As noted, “the proof of concept demonstrated the ability to synchronize settlement in one instant payment system with settlement in the other and to convert real-time messages between both systems”.

The program which is based on ISO 20022 message standards, SWIFT Go and the instant payment systems of EBA CLEARING and TCH will support the instant payments in US Dollar and Euro currency corridor. As emphasizing that it is also being developed with a view to accommodate other currencies and payments systems too.

“Aside from delivering a simple and transparent service for end-users, our key aim is to keep things easy for financial institutions: the fact that there is no need to connect to a separate payment system should make the service very attractive for RT1 and RTP participants of all sizes”, said Erwin Kulk, Head of Service Development and Management at EBA Clearing.

In 2023, it is expected to have a full service following the IXB pilot service with key features such as speed, access, cost and transparency. The list of banks in IXB initiative are ABN AMRO Bank, Allied Irish Banks, Bank of America, Bank of New York Mellon, BBVA Group, BNP Paribas, Crédit Agricole, Deutsche Bank, ERSTE Group Bank, Helab. HSBC, ING, Intesa Sanpaolo Bank, KBC, J.P. Morgan, PNC Bank, Societe Generale, Toronto Dominion, UniCredit S.p.A., UniCredit Bank (HypoVereinsbank) and Wells Fargo.