SWIFT says it has held exploratory talks with banks from the Asia Pacific region, including Australia’s ANZ, Commonwealth Bank, NAB and Westpac, and Bangkok Bank, Bank of China, China Construction Bank, China Guangfa Bank, DBS, ICBC, Kasikornbank, Siam Commercial Bank, and UOB, about the development an Asia Pacific cross-border real-time payments system based on global payments innovation (gpi).
At a series of workshops, SWIFT and the participating banks determined that such a service would have significant benefits that would extend beyond gpi banks and their customers, deep into the domestic markets, “eventually affording a complete real-time cross border payments experience for all bank customers in the region”.
Phase 1 would see the introduction of a new real-time gpi sub-scheme, to facilitate real-time cross-border payments between gpi banks in the region. Building on the “significant success” of SWIFT gpi payments, which already significantly reduce cross-border payment times to minutes, will ensure real-time settlement of cross-border payments between signatory gpi banks in the region.
Phase 2 would effectively extend the SWIFT gpi rails into existing real-time payment systems within each recipient country, ensuring that “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 that are 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. This aims to enable both sending and receiving account holders to benefit from a full real-time payments experience – again independently of whether they hold accounts at banks that are connected to SWIFT or using gpi.
Eddie Haddad, managing director of SWIFT Asia Pacific, said: “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”.
“SWIFT is uniquely positioned to help our customers leverage their existing investments in infrastructure, to standardise connectivity across multiple markets and to drive efficiencies in support of cross-border trade, facilitating further integration in the ASEAN region.”
Haddad said SWIFT and participating gpi member banks had begun work on defining a common cross-border real-time scheme that banks could review and test.
He said the design of the new service would build on existing SWIFT gpi service rules to help resolve additional business process frictions in the payments chain.
SWIFT has also commenced discussions with the New Payments Platform in Australia to enable SWIFT gpi payments to be processed onwards through their newly launched domestic real-time payments system. SWIFT has helped to design, build and deliver the NPP, and is playing a key role in operating its infrastructure.
SWIFT says gpi, launched in 2017, already accounts for nearly 10% of SWIFT cross-border payment traffic, and is enabling more than a US$100 billion dollars to be transferred across the world rapidly and securely every day.
“SWIFT gpi already reduces cross-border payment times to minutes, even seconds and indeed nearly 50% of gpi payments are already being completed in less than 30 minutes," said Haddad.
“This new scheme will both further speed up those payments, and extend the reach of the gpi capability far deeper into domestic markets, driving radical change in the cross-border payments market across the region. We look forward to seeing this work in practice and to more countries, and banks joining the new service.”