Powering Payments: Enhancing Cross-Border Payments & Sibos 2023
· Cross-border payments on Swift exceed the G20’s Processing Speed Target
· At present only 60% of wholesale payments reach customer accounts in that timeframe due to delays at the beneficiary leg caused by issues including regulatory controls, batch processing and opening hours of market infrastructures.
In 2020, the G20 announced several goals to enhance the speed, cost, transparency, choice and access of cross-border payments. Today, we’re pleased to announce that we’ve made strong progress towards these goals, with 89% of transactions processed on our network reaching recipient banks within an hour.
That’s already well ahead of speed targets set by the Financial Stability Board to achieve one-hour processing for 75% of international payments by 2027. The momentum underscores our work to expedite delivery and enable banks to offer a better service to their end-customers. It also challenges misperceptions that payments are often required to travel through chains of intermediary banks to their final destination. Data from our network shows that 84% of all payments on the network are conducted directly or with a single intermediary.
While in-flight processing between originating and beneficiary banks has significantly accelerated, there is still more to be done at industry level to fully achieve the bar set by the G20. At present only 60% of wholesale payments reach customer accounts in that timeframe due to delays at the beneficiary leg caused by issues including regulatory controls, batch processing and opening hours of market infrastructures.
“Our strategy to transform cross-border payments is delivering tangible results. Swift already exceeds the G20 target on speed for processing on our own network, and we are well on track towards meeting the other targets,” said Thierry Chilosi, Chief Strategy Officer at Swift.
“The G20 roadmap to enhance international payments recognises the critical role these transactions play in the growth of the global economy – and how necessary industry-wide collaboration is to achieving tangible improvements. Swift will continue to work closely with the financial community to meet these targets and foster a more inclusive global economy built upon the seamless movement of value across the world.”
There’s more to come
In addition to helping the financial services industry meet the G20’s target for speed through services like Payment Pre-validation and Swift GPI. Swift continues to support industry efforts to address other challenges identified by the G20:
Swift GPI has transformed cross-border payment transparency with the end-to-end visibility it offers on transactions. We’re also investing in the low-value cross-border payments space with Swift Go – helping banks offer a fast, predictable and competitively priced solution to their consumer and SME customers. Meanwhile, Swift Securities View is enabling end-to-end tracking of securities transactions, preventing the costly challenge of settlement fails.
We know that friction can cost the industry and slow payments down and are working to reduce the impact it has on our industry. To do this, we’re improving our data, interoperability and screening services and constantly evolving Payment Pre-validation. This API-based solution removes millions of costs to the industry around failed transactions and improves the cross-border experience.
Choice and access
We’re opening up new ways for our community to access the capabilities we offer, including cloud and API-based connectivity options both for messaging and full-transaction services, powered by our new Transaction Manager
As new payment means and models to connect to instant payment systems emerge, securing interoperability between domestic or network-based ‘digital islands’ is becoming more important. To help our community meet the G20 targets, we’ll continue to focus on addressing fragmentation head-on. Whether that’s by collaborating with central banks to develop an interlinking solution for CBDCs, or by working with market infrastructures to enhance settlement models.