By Megan Doyle
SWIFT’s new service expands on its integrated payments toolkit, which strives to ensure smooth, seamless payments through a fully integrated, network-wide service. Specifically, it is said to improve payment transparency, shorten payment resolution time, and reduce the need for manual intervention when payment discrepancies occur.
The new service is currently being piloted by 12 major banks and three case management software providers. It is slated to go live in November 2019.1
While more than 90 percent of international payments sent via SWIFT are fully processed within 24 hours, unstandardized payment regulations and requirements in the international payments landscape can slow the remaining 10 percent of cross-border payments to a halt.2 Though infrequent, these slowed or rejected payments are costly and time-consuming for international businesses making overseas payments.
In practice, these issues typically arise from missing or incorrect information, such as payment date, reason for the payment, or differences in regulations or payment requirements based on the jurisdiction. When more information about a transaction is needed, an investigation case must be opened.3 Resolving an investigation case can often require multiple requests and responses across chains of banks—all of which might have different regulatory and compliance standards, complicating the process further.
SWIFT plans to address the common problems of international payments with its new investigation and resolution service.4 Available in the cloud, the new service is an expansion of SWIFT’s existing network-wide payments validation toolkit, which aims to streamline international payments.
Specifically, SWIFT’s new money-transfer system enables banks to dynamically handle payment queries in order to quickly resolve instances in which required compliance, regulatory, or operational information is either incorrect or missing from payment instructions. By using SWIFT’s global payments innovation (GPI) tracking technologies, transparency will be increased, and banks across the entire payment chain will be able to interact in a more efficient manner, says SWIFT. This promises reduced resolution time, ultimately trimming the amount of effort and money a business might spend to resolve payment discrepancies.
SWIFT’s new payment investigation and resolution service directly complements its existing gpi capabilities.5 For example, the SWIFT gpi tracker lets users gain a transparent view into the payment process. This means users can more easily identify payment discrepancies, including which intermediary or beneficiary banks might be responsible for the issue. Application Programming Interface (API) “calls” can then be used with the gpi tracker to automatically provide necessary information to the correct bank, speeding up the resolution process.
The new service also complements the group’s integrated gpi pre-validation service, which is aimed at identifying and eliminating payment errors and missing information prior to payment initiation.6 In other words, by validating a payment beforehand, SWIFT’s investigation and resolution service can resolve payment discrepancies while a payment is in-flight.
Working to standardize international payments and further improve the payment resolution process, SWIFT’s new service uses ISO 20022 standards.7 ISO 20022 is a data exchange and messaging standard meant to streamline international payments by providing precise and consistent data about payees and invoices.8
Finally, the service facilitates 14 enquiry types with three payment types in order to effectively cover any field of payments message going into the future, says SWIFT.9
Compared with domestic payments, the international payments landscape is rife with complexities due to a lack of global standards and regulations, and payment discrepancies can be costly and time-consuming for international businesses. SWIFT’s new cloud-based payment investigation and resolution service could be a promising solution to help businesses quickly resolve issues when making cross-border payments.
Megan Doyle is a business technology writer and researcher based in Wantagh, NY, whose work focuses primarily on financial services technology.
1. “SWIFT Rolls Out Payment Investigation, Resolution Service,” PYMNTS.com; https://www.pymnts.com/news/faster-payments/2019/swift-cloud-based-payment-investigation-resolution-service/
2. “Pre-validation of gpi payments,” SWIFT; https://www.swift.com/our-solutions/global-financial-messaging/swift-gpi/the-future-of-swift-gpi/pre-validation-of-gpi-payments
3. “SWIFT launches new frictionless case resolution service to speed up cross-border payments,” SWIFT; https://www.swift.com/news-events/news/swift-launches-new-frictionless-case-resolution-service-to-speed-up-cross-border-payments
6. “SWIFT Rolls Out Payment Investigation, Resolution Service,” PYMNTS.com; https://www.pymnts.com/news/faster-payments/2019/swift-cloud-based-payment-investigation-resolution-service/
7. “SWIFT launches new frictionless case resolution service to speed up cross-border payments,” SWIFT; https://www.swift.com/news-events/news/swift-launches-new-frictionless-case-resolution-service-to-speed-up-cross-border-payments
8. Smarter Payments Tracker: June 2019, PYMNTS.com; https://www.pymnts.com/wp-content/uploads/2019/06/smarter-payments-tracker-june-2019.pdf
9. “SWIFT launches new frictionless case resolution service to speed up cross-border payments,” SWIFT; https://www.swift.com/news-events/news/swift-launches-new-frictionless-case-resolution-service-to-speed-up-cross-border-payments