Swift gains license for Eurosystem gateway connections
Payments messaging standards provider Swift has received a license to offer connections to all of the Eurosystem market infrastructures for payments, securities settlement and collateral management.
The license as a network service provider will allow Swift to connect to the Target Instant Payment Settlement and other services provided through the Eurosystem, starting in November of 2021.
With various competitors seeking to dent Swift's hold on payment processing at banks globally, the license to provide the European Single Market Infrastructure Gateway to customers is a boost the Brussels-based messaging service.
The Eurosystem is seeking to consolidate all of its services and migrate to the single gateway in the coming years.
"We are delighted to become the network service provider for all Target services," Alain Raes, chief executive for swift in the Europe, Middle East and Asia Pacific regions, said in a Monday press release. "We take our role in this major infrastructure project very seriously and are already working with both the Eurosystem and our customers to raise market awareness about the tight timeline and to ensure a smooth and successful community migration."
Prior to the single channel connection gateway option, Swift has been providing its European bank customers with connections to the Target instant pay settlement service.
With the single-market gateway, Swift says it will provide the quality and competitive pricing its customers will need to have access to the settlement service, and the Target2 for high-value payments, as well at Target2 services for securities settlement and a future collateral management system.
The connections to the single market gateway will allow Swift customers to process all euro payments — high-value, SEPA, instant and cross-border.
In addition, Swift says its connection to Target services will "future-proof and maximize" the banks' investments because of the single-window connectivity.
The services will also prepare the banks for Target2's traffic migration to the ISO 20022 messaging standard, which enhances validation and translation of transactions. Swift is encouraging banks to view the migration to Target payments services in conjunction with other ISO 20022 migrations occurring in the same time frame.
The ISO 20022 migration is scheduled to start in November of 2021, when it comes in use with the U.S. Federal Reserve's Fedwire, The Clearing House, the Bank of England's Clearing House Automated Payment System and other networks.