SWIFT and member banks tight-lipped on costs of new low-value cross-border payment service
Cross-border payments have been disrupted in recent years by fintechs that have challenged incumbents with low-cost services. The venerable Belgium headquartered interbank payments consortium SWIFT is now attempting to fight back with the launch of SWIFT Go which is a new service aimed at small businesses and consumers.
However, SWIFT’s claims that the service would allow ‘fast, predictable, highly secure, and competitively priced low-value cross-border payments anywhere in the world’, look doubtful given the opacity about the costs for users. Historically, SWIFT payments have been prohibitively expensive for lower value users as a result of high transaction charges imposed by member banks.
Seven banks namely- BBVA, Bank of New York Mellon, DNB, MYBank, Sberbank, Société Générale, and UniCredit- which according to the press note handles 33 million low-value cross-border payments per year are already live with this service, according to SWIFT.
Commercial Payments International reached out to SWIFT and banks in question seeking clarity on the cost aspect of the newly launched service but SWIFT declined to comment while BBVA, UniCredit, Société Générale and Bank of New York Mellon didn’t respond to a request for comment regarding the cost of the service.
In contrast, competitor fintech Wise (previously TransferWise) in its Q4 2020 report had mentioned that the average price of using its cross-border payments service was 0.69% of the payment amount.
The new SWIFT service builds upon the high-speed rails of SWIFT gpi and the consortium also stated this would ‘strengthen the capabilities of banks to serve their customers in the high-growth small business and consumer payments segments’ having large Swift’s network that connects 11,000 institutions, and 4 billion accounts across 200 countries worldwide.
In the past couple of weeks, SWIFT announced two major news related to its cross-border payments service in which it first announced that major international banks had endorsed the consortium’s transaction management platform while in other news, it went live with payments upfront verification service.