SWIFT gpi Instant Cross-Border Payments Trial Hailed a Success

All payments during the trial were processed end-to-end within 60 seconds, demonstrating the service’s capabilities to scale and integrate with other real-time payment systems.

SWIFT has announced the results of its new proof of concept, which was aimed at enabling instant cross-border payments in real-time domestic payment systems.

Since going live in 2017, SWIFT gpi (global payments innovation) has been adopted by over 270 financial institutions and removed many common frictions experienced in cross-border payments. With more than USD 100 billion in SWIFT gpi messages sent every day, it has been able to credit 50 percent of gpi payments to end-beneficiary accounts within 30 minutes and many within seconds.

The launch of Australia’s domestic instant payment system, the New Payments Platform (NPP), provided the opportunity for SWIFT and a group of banks to study the feasibility of enabling the gpi service in a domestic real-time payments system and explore how it could speed up cross-border payments.

In August, SWIFT announced plans to test the SWIFT gpi payment service in APAC using the NPP, with participation from 12 banks in Australia, China, Thailand and Singapore. They included Australia’s NAB, ANZ and CBA; Thailand’s Bangkok Bank, Kasikornbank and Siam Commercial Bank; China’s BOC, CCB and ICBC; and Singapore’s DBS Bank, UOB and StanChart.

Initially expected to provide near-instant availability of funds for all cross-border payments, the trial has now been completed and is being hailed as a “huge success”. The results were unveiled in Sydney on the first day (22 October) of Sibos, SWIFT’s annual banking and finance conference.

According to SWIFT, the fastest gpi payment in the trial was sent from China, reaching the end beneficiary account in Australia via the NPP in 18 seconds. The fastest test payments from Singapore and Thailand were credited to Australian end beneficiaries via the NPP within 30 seconds. All payments sent during the trial were processed end-to-end within 60 seconds, including payments both during and outside business hours in Australia.

“This trial has indeed confirmed that the SWIFT gpi ‘payments in seconds’ experience can be extended seamlessly via domestic real-time payment systems to all NPP enabled bank accounts,” SWIFT said in a statement.

Most real-world requirements were also simulated in the test, including screening, payment validations, liquidity management, message transformation and real-time status updates to the SWIFT gpi tracker.

“These results demonstrate two important prerequisites necessary to realise an instant cross-border payment service in the region,” said SWIFT managing director Eddie Haddad. “First, we are able to extend the window for processing cross-border payments outside traditional business hours. Second, by linking cross-border SWIFT gpi payments with domestic real-time payment systems, we are able to achieve faster cross-border payments amongst a larger number of institutions.”

Haddad also noted that the results demonstrate the ability of SWIFT gpi to improve efficiency in SME trade settlement and could enable fully scalable connectivity to help drive ASEAN integration. SWIFT gpi has already been adopted by 21 banks across ASEAN.

“The new service will also facilitate anytime-anywhere peer-to-peer payments in areas such as mobile-to-mobile payments, loan repayments, and student tuition payments,” Haddad added. “This is just the beginning.”

The findings from the trial are being used to finalise a new SWIFT gpi instant cross-border payments service which will be able to scale and integrate with real-time payment systems in other jurisdictions.

SWIFT is in already discussions with multiple domestic real-time payment operators and regulators to discuss how payment corridors could be linked to gpi, using SWIFT’s existing infrastructure and incrementally adding business rules to remove residual business frictions in the payments chain.

Currently over 30 percent of all SWIFT customer payments are now sent on gpi, but the service will be extended to all 10,000 banks on the SWIFT network by the end of 2020.

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