Swift getting Asia-Pac banks on board for cross-border, real-time payments

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The Society for Worldwide Interbank Financial Telecommunication has its sights set on expanding real-time payments in the Asia-Pacific region as part of its plan to further its first value-add service created from the Global Payments Innovation initiative.

Swift has joined a group of its banks deploying the GPI from Australia, China, Singapore and Thailand to develop a cross-border, real-time payments service using customer credit transfers that were introduced through GPI. The GPI was launched a year ago with real-time payments as a goal, but mostly to get Swift member banks all operating on similar platforms and policies, even through legacy systems.

Swift has held preliminary talks about developing real-time payments with banks from the Asia Pacific region, including ANZ, Bangkok Bank, Bank of China, China Construction Bank, China Guangfa Bank, Commonwealth Bank, DBS, ICBC, Kasikornbank, NAB, Siam Commercial Bank, UOB and Westpac.

The group agreed the service should be rolled out in three phases, the first being the introduction of a new real-time GPI sub-scheme to facilitate real-time cross-border payments between the GPI banks in the region.

The second phase would extend the Swift GPI rails into existing real-time payment systems within each recipient country, saying it would ensure “inwards and onwards” payments can be settled in real time in each of the four markets, irrespective of whether the final beneficiaries hold accounts at banks that are connected to Swift or using GPI.

A third phase would look to link domestic real-time payment systems via Swift GPI to facilitate full cross-border real-time payments between their respective customers. It would enable both sending and receiving account holders to benefit from a full real-time payments experience.

“With the widespread adoption of domestic real-time payments systems in the region, a cross-border real-time service is both a natural extension for Swift GPI in Asia Pacific and a real game-changer for bank customers," Eddie Haddad, managing director of Swift Asia Pacific, said in a Monday press release. "Swift is uniquely positioned to help our customers leverage their existing investments in infrastructure, to standardize connectivity across multiple markets and to drive efficiencies in support of cross-border trade, facilitating further integration in the region.”

Swift and participating GPI member banks have begun work on defining a common cross-border real-time scheme that banks can review and test.

GPI already accounts for nearly 10% of Swift's cross-border payment traffic, and is enabling more than $100 billion to be transferred across the world rapidly and securely every day, according to Swift. More than 160 banks, including 48 out of the 50 top banks on Swift, have signed up to the service, sending hundreds of thousands of payments daily across 350 country corridors, including the U.S. and China, where GPI already accounts for more than 30% of payment traffic.

Participating banks have been equating the development of GPI and faster payments as a major benefit for customers.

“We are continually looking for opportunities to deliver better customer experiences, and key to this is collaborating with like-minded organizations and leveraging API technology," Paul Franklin, general manager for payments, customer products and services at National Australia Bank Limited. "Enabling real-time delivery of cross-border payments will provide significant benefits to our customers."

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Cross border payments Real-time payments Network rules SWIFT