SWIFT announces successful test results of its new instant cross-border payments proof of concept, involving banks in China, Singapore, Thailand and Australia. The trial demonstrated that by enabling gpi (global payments innovation) in real-time domestic systems, payments can be effected almost instantly, even when they involve domestic settlement and non-gpi banks.
The banks participating in the instant cross-border payments trial are National Australia Bank, Australia and New Zealand Banking Group, Bangkok Bank, Bank of China, China Construction Bank, Commonwealth Bank, DBS, Industrial and Commercial Bank of China, Kasikornbank, Siam Commercial Bank, Standard Chartered and United Overseas Bank.
Since going live in 2017, SWIFT gpi has removed many of the common frictions experienced in cross-border payments. 50% of gpi payments are now being credited to end-beneficiary accounts within 30 minutes and many of those within seconds. The fastest payment made directly between gpi banks in these corridors was initiated from a gpi bank in Singapore and credited to a bank account at an Australian gpi bank within nine seconds. In effect, this is already a live real-time cross-border payment.
However, when there are multiple banks involved in the payment chain, and the final leg needs to be cleared within the recipient country, the domestic payments are sometimes delayed owing to the limited operating hours of the local clearing systems. With the advent of real-time payments systems, which typically operate 24/7, there is an opportunity to remove these frictions and ensure that many of these payments can be credited in seconds rather than hours.
The debut of Australia’s domestic instant payment system, the New Payments Platform (NPP), enabled SWIFT and a group of banks from Australia, China, Singapore and Thailand*, to study the feasibility of enabling the gpi service in NPP and to review how this would enable these cross-border payments to be sped up.
What the trial sought to establish was whether, by integrating and enabling the service via gpi members into a domestic instant payment system, the gpi experience could be extended deeper into domestic markets, to end beneficiaries’ accounts, even outside normal business hours. This trial has indeed confirmed that the SWIFT gpi “payments in seconds” experience can be extended seamlessly via domestic real-time payment systems to all NPP enabled bank accounts.