Sebastian Rojas (SWIFT): Payments without borders
Sebastian Rojas, Head of SWIFT gpi for Corporates, says the gpi brings a dramatic transformation of crossborder payments processes for corporate treasury.
Why did SWIFT create a payment tracking solution for its network?
SR: Change is coming to cross-border payments with local markets going real-time and regulators advocating for transparency with initiatives like the EU’s PSD2 making open banking a reality. Why should international payments take three, four or more days compared with seconds for everyday retail transactions; and why are the payments made by corporations across the world so hard to trace? We initiated discussions with the community to analyse the obstacles that corporates faced in their cross-border payments business and decided how to best tackle them by minimising friction and improving payment processes. We needed to take in consideration the business processes in different countries and regions to ensure same-day payment services. It is not replacing one technology with another, but addressing the key problems with a pragmatic and scalable approach.
In concrete terms, how can corporates use gpi?
SR: Currently more than 250 banks have joined gpi and 70 of these, which have already integrated it into their systems, can provide same-day payments and immediate responses to queries. Furthermore, leading cash management banks are starting to integrate gpi into their e-banking portals, enabling corporates to track and trace payments, including details such as routing and transaction cost. Fifteen banks now provide this functionality to their customers, passing on the transparency directly to their users.
"Currently more than 250 banks have joined gpi and 70 of these, which have already integrated it into their systems, can provide same-day payments and immediate responses to queries."
What impact will gpi have on corporates that use multiple banks?
SR: SWIFT is working with corporates, banks and treasury vendors to define gpi multi-bank standards supporting FIN and ISO messages. The big change for corporates is the ability to generate a gpi tracking number (unique end-to-end tracking reference - UETR) at payment initiation and the possibility of receiving harmonised gpi tracking statuses from all their banking partners directly in their treasury systems. This will also ensure a consistent experience regarding fees and payment routing from their gpi banks. SWIFT is currently testing this new standard through a pilot programme with ten multinationals including Airbus, Booking.com, Borealis, General Electric, IATA, LVMH Moët Hennessy Louis Vuitton, Microsoft, Ping An Group, Roche & RTL Group as well as 12 leading transaction banks. The pilot group aims to bring this standard into production in the coming weeks. In the meantime, we are looking to open this new service to more gpi banks and corporates before the end of the year.
How is SWIFT ensuring that treasury vendors are ready?
SR: SWIFT is working with leading cash management and treasury providers to support the integration of gpi standards in their applications. As part of the gpi for corporates pilot, several providers such as FIS, SAP, DataLog and Calypso are already supporting gpi implementation for their pilot customers. We are also in contact with additional providers ensuring that all information is available for them to start their gpi integration. In addition, corporate demand for the gpi service is helping to encourage vendors and providers to enable their gpi capabilities.
How are corporates contributing to the building of the gpi roadmap?
SR: Corporates have a fundamental role to play as banks start to enable services on top of gpi. Not only by asking their banks about gpi capabilities but also by becoming early adopters of new solutions or services. Such an approach will help to ensure that future solutions meet their evolving requirements and priorities. For instance, in the context of gpi for corporates, SWIFT has designed the standards through a series of SWIFT-led co-creation workshops with pilot banks and corporates. At SWIFT we are always listening to the feedback from corporates, identifying business requirements and developing new solutions based on the community feedback.
What’s next after payments tracking?
SR: SWIFT will extend gpi to all cross-border payments, starting in November this year by making all crossborder payment messages trackable in the network. By the end of 2020, every bank on the network will be able to offer same-day, end-to-end delivery with full tracking and transparency, throughout the payment chain. In November we will also launch Stop & Recall, a new service allowing banks to stop payments after initiation. This service looks at optimising a very complex and slow process requiring multiple bank interactions and phone calls to perform a simple but time-critical task. Stop & Recall will enable gpi banks and corporates to stop a payment in the network by using its tracking number. This new service will enable corporates to address manual mistakes such as double-payments or even in some cases quickly act on any fraud concerns.