e-commerce by giving buyers more control over the an intermediary is acknowledged with a standardized
timing of payments, while expanding the potential of message providing transparent information on timings,
billers or sellers to offer real-time services. fees, foreign exchange rates, and other details. This
Real-time payments have become the de facto
approach preserves the integrity of remittance details
standard in countries where they have been made throughout the payment using an end-to-end payment
widely accessible. As an example, India’s real-time reference code.
Immediate Payment Service, or IMPS, is now offered
Just as logistics companies track the location of
by almost all the major banks at minimal cost. One a package from origin to destination, banks using
of the largest banks in India offers free transfers for SWIFT gpi will be able to provide tracking details of
transactions under INR ₹ 1,000 (USD $14), with larger any international payment, along with unambiguous
transfers available for INR ₹ 3 (USD $0.04) or less. breakdowns of fees and exchange rates. These
This fee structure is highly disruptive to legacy methods innovations give corporate treasurers unprecedented
of payments, and the 24x7x365 experience is redefining advantages in liquidity management.
expectations for payment speed throughout India’s
online economy.
In February 2017, SWIFT gpi V1 went into effect, with
standards for SLAs covering end-to-end tracking of
global Commercial Credit Transfers. The next milestone
SWIFT gpi
International payments associated with trade and
foreign exchange are also moving faster than ever.
SWIFT gpi (“global payments innovation”) provides
end-to-end visibility of transactions at each stage
throughout the payment processing chain until the
money reaches the beneficiary’s bank. With SWIFT
gpi, banks can process international payments on the
same day, and with greater transparency over the fees
and foreign exchange rates applied.
Prior to SWIFT gpi, cross-border payments were
takes place in November 2018 with SWIFT gpi V2,
which, among other improvements, introduces the
“gSRP” Stop and Recall Payment service, which will
enable the sender of a payment to cancel payment
already in progress, at any point prior to receipt by the
beneficiary. Senders will be able to respond quickly and
effectively to compliance questions, solvency issues, or
any other business situations.
Challenges for
legacy IT systems
expensive and often difficult to track from one The domestic and international acceleration of
correspondent bank to the next. At times it would payments will reshape the competitive dynamics
often take several days for funds to be credited to a throughout the banking industry.
beneficiary, and during this extended transfer period,
Prior to the introduction of industry-wide
senders of a payment had only limited visibility into its standardization for faster payments processing,
status. Moreover, following the payment, both sender banks were at risk of becoming merely back-office
and receiver had to reconcile complex, opaque fee settlement mechanisms for non-bank networks. Now,
structures. with standardization in domestic real-time payments,
The new bank-run, cloud-based approach of SWIFT
banks have new opportunities to innovate in C2C,
gpi places correspondent banks, intermediary banks, B2C, and B2B payments domains; new approaches to
and clearing firms together on a common platform compete or collaborate with payment solutions offered
with a consistent set of business rules and service by fintech companies and alternative solution providers;
level agreements (SLAs). Each successive transfer to and new potential transaction-based revenue streams
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