Riding on SWIFT gpi, banks take on non-bank payment companies
As tussle between banks and non-bank payment companies continue in order to dominate the payments space, banks are racing to persuade their business customers to go digital and make B2B payments simpler and transparent. BBVA and DBS are the latest banks rolling out SWIFT gpi to a broader user base.
The interbank payments consortium SWIFT, which received a set back after delaying ISO20022 migration, is taking several other measures to make cross-border payments accessible to wider markets.
In first, Spain based financial services company, Banco Bilbao Vizcaya Argentaria (BBVA) has tested a pilot program to connect SWIFT gpi network with UK’s nationwide instant payment infrastructure.
BBVA group run this test along with five financial institutions in Europe, North America and Asia-Pacific. According to the press release, the goal of this pilot run was to test the integration of SWIFT gpi with the British instant payment platform ‘The Faster Payments Scheme’ (FPS).
The results of this test run were successful, according to the BBVA and showed the ‘global potential that exists to eliminate the time zone restrictions, which will no longer be an obstacle to payment processing. It also demonstrated that gpi SWIFT’s integration with instant payment systems is globally scalable.’
“With the integration of SWIFT with the Faster Payment chamber, we are going to further enhance customer experience, adding real-time processing of payments in British pounds to the benefits gpi already offers, tracking from start to finish and transparent costs,” said Raouf Soussi, the head of Corporate Payment Strategy at BBVA.
BBVA had done a similar test last year, experimenting with transferring of money to any nation around the globe. Under that test, it demonstrated that ‘ transfer times can be further reduced in SWIFT gpi international transfers by connecting with the instant payment networks that already exist in different countries’, the press release noted.
Last year’s test was done in the liquidation of euro in ECB’s instant payments platform TIPS while this year’s test run payments were liquidated in pounds in the FPS platform, the press release said.
In another corner of the globe, DBS Bank has launched real-time payments online tracking service for cross-border collections which according to the bank would provide corporates with greater digital convenience.
This real-time tracking is based on SWIFT’s gpi, over 240,000 DBS corporate and SME clients in Singapore and Hong Kong will get this service first, allowing them to track their cross-border payments and collections online with no additional fee involved.
According to the press release, traditionally tracking of cross-border payments meant that corporates used to reply on a copy of SWIFT message from the remitter, which confirms their remittance instruction has been processed by their bank. For time to time updates, clients had to depend on banks to provide information but the with the DBS Bank offering of real-time tracking cross-border collection, clients would have to log in to DBS Ideal corporate banking portal to get the update of the payment.
“The importance of enabling real-time tracking of cross-border payments and collections amid the landscape we operate in today cannot be underplayed as it helps businesses improve their working capital management and fosters trust with overseas counterparties,” said Roaf Latiff, head of the digital for DBS’ institutional banking division. Adding further, “This, in turn, helps improve supply chain efficiencies and encourages economic growth, enabling countries to bounce back faster from the pandemic”.
DBS Bank is also planning to expand cross-border collection solution in China, India, Indonesia, Taiwan and Vietnam in the coming months.
SWIFT in recent months has introduced a new strategy for securities processing and cross-border payments infrastructure as well as low-value cross-border payments services.