A new standard - for cross-border payments
Damien Godderis, senior product manager for global cash management at BNP Paribas, says SWIFT’s gpi is revolutionising cross-border payments through increased speed, traceability and transparency.
How is SWIFT gpi changing the environment for cross-border payments?
The world of international payments has not evolved significantly for years. Changing that is the goal of SWIFT’s global payments innovation service, which has today been adopted by more than 150 banks worldwide and covers more than 220 countries, with the system now live for 43 institutions accounting for at least 15% of international payments traffic. For BNP Paribas, gpi is now the new standard, offering same-day payment execution along with the transparency and traceability that are required by retail customers and especially our corporate clients. The initiative was launched by SWIFT two years ago and quickly struck a chord with banks conscious of the need to improve the quality of service for international payments. The great advantage of gpi over other international payment solutions is that the network already exists and connects the world’s banks, so it offers global reach and is easier for institutions to adopt and implement.
"The reference number makes clear that it is a gpi transaction, enabling institutions to react more quickly to any issues or delays." - Damien Godderis, senior product manager for global cash management, BNP Paribas
What is the critical innovation that enables gpi to facilitate international payments?
The key element in gpi is a unique reference number used by all banks involved in the transaction, allowing SWIFT to identify the transaction in its network, track it and collect all information relating to the payment. The reference number makes clear to the banks involved in the payment chain that it is a gpi transaction, enabling all parties to be updated on its status, and prompting institutions to react more quickly in the event of any issues or delays and to inform their customers whether or not it has been completed. Corporate clients can authorise their beneficiaries to track incoming payments, while payees can obtain a confirmation of credit to the beneficiary, important where this is the trigger for dispatching goods. Further functionality is coming this year, including to stop and recall payments, currently a very cumbersome process for international transactions. Instant identification of the holder of the payment enables a cancellation request to be sent through the SWIFT network – vital in reacting rapidly to prevent fraud. The roadmap for the future includes development of a payment assistant to offer client choices of paths that they can validate in advance.
What other important developments are taking place in the treasury field?
There is currently a great deal of activity identifying valid use cases for blockchain initiatives. At BNP we are developing a blockchain for internal payments, which will begin operation in April, and we are looking at initiatives outside the banking world such as the Ripple Transaction Protocol. We are also a member of the R3 blockchain platform consortium and have our fintech labs. Gone are the days when projects were so long-term that often products were obsolete by the time they were delivered. Today we focus on co-development, often with fintech partners, on the basis of three to six months’ time to market, followed by feedback and further development to add new functionality. For example, we are analysing providers (Banks and Fintech) that would enable the bank to further extend the network for international payments by having access to different local ACH , so we do not have to build partnerships one bank at a time.. The goal of our fintech labs is to review all initiatives on the market, whether in cash management, trading or supply chain, identify technology that can add value and quickly develop a proof of concept. If it’s successful, we industrialise it – we no longer wait for a full product to attack the market.