Swift Calls for Collaboration on Cross-Border Payments
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Cross-border payments challenges should not be solved with closed loop systems, global payments network Swift said in a call to the payments community, including market infrastructures, banks and fintechs.
Its white paper, Payments: Looking to the Future,» lays out the financial services firm’s vision of cross-border payments as one that is «seamless and convenient as domestic ones: instant, accessible, ubiquitous, saying the increase in cross-border flows, new technology enabling improvements, and end-customers demanding a better customer experience as changes that are shaping the global payments industry.
Innovations in domestic retail payments have transformed entire markets, and facilitating the exchange of value beyond tightly knit domestic, single-currency communities is inherently more complex for banks, the paper noted.
Cooperation by all players in the community is important, because the openness and universality of the envisioned system are unique; the more widely adopted the convention for moving value, the easier the circulation of value – and the more the convention will be used. Banks are key in this, Swift said, asking for the widespread adoption of its global payments innovation (GPI) service.
According to Swift, API technologies supporting open, agile architectures are supporting the revolution in international payments as they allow fintechs to offer value-add services and banks to differentiate themselves by layering services and products.
Payments are not an end in themselves – they exist to enable investment, trade and commerce, Swift said.
Swift launched its GPI service in 2017 to increase the speed, transparency and tracking of cross-border payments. It currently remains optional for banks but its ambition is to create a new standard in cross-border payments, and said it expects it to be the universal standard by 2020.
In January, it accounted for 55 percent of cross-border payment instructions carried on the network, and about $300 billion in transfers daily.
Questions & Answers
Q.Why does Swift believe that closed-loop systems are not the right solution for cross-border payment challenges?
Why does Swift believe that closed-loop systems are not the right solution for cross-border payment challenges?
Swift's vision for cross-border payments is for them to be smooth and convenient, like domestic payments. They advocate for cooperation among all players, emphasising that openness and universality are crucial for the widespread adoption and easier circulation of value.
Q.What role does Swift see for banks in improving cross-border payments?
What role does Swift see for banks in improving cross-border payments?
Swift considers banks key to improving cross-border payments. The organisation is asking for the widespread adoption of its global payments innovation (GPI) service, which it launched to increase the speed, transparency, and tracking of international transfers.
Q.What is the current status and ambition for Swift's global payments innovation (GPI) service?
What is the current status and ambition for Swift's global payments innovation (GPI) service?
The GPI service, launched in 2017, remains optional for banks, but Swift's ambition is for it to become the universal standard. In January, it handled 55 percent of cross-border payment instructions on the network, accounting for about $300 billion in daily transfers.
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