Swift pilots API-based pre-validation service to cut payment errors

SWIFT announces it will begin piloting an integrated pre-validation gpi payments service with 14 major banks from around the world. The initial focus of the pilot is on enabling the fast identification and elimination of errors in payment messages.

„A real-time API-based mechanism will enable sending banks to send and receive API calls over SWIFT to seamlessly check beneficiary account information with the ultimate receiving banks. This will allow banks to speedily remedy any inaccurate or missing information, reducing delays and costs.”, according to the press release.

The pilot is the first stage in the roll-out of the ambitious gpi pre-validation programme, which will also look at using predictive analytics and artificial intelligence to improve the predictability of international payments.

Many payments that are held up are done so due to errors in data like incorrect or missing beneficiary or regulatory information. The gpi pre-validation service will ensure the vast majority of these preventable errors and omissions are corrected before the initial instructions are sent, so that the instruction can be processed straight-through.

„Next year, the gpi pre-validation service will be complemented by a new investigation and reconciliation service that will facilitate the settlement of any remaining payment inquiries and investigations.”, according to the Swift.

Today, more than 50% of all of SWIFT’s cross-border payment volumes are sent as gpi. And more than 50% of SWIFT gpi payments are credited to the beneficiary in less than 30 minutes with many arriving in just a few seconds.

Luc Meurant, Chief Marketing Officer, SWIFT, said: “SWIFT gpi has already created a fast and frictionless cross-border payment experience for many banks and corporates – but we know that there are still payments which can be sped up further by ensuring the correct information is provided at the start. By embedding this new capability in the same payment messaging channel, thousands of banks will benefit from the resulting efficiencies, thus boosting the financial services industry as a whole as we move toward universal implementation of gpi in 2020.”

Manish Kohli, Global Head of Payments and Receivables, Citi Treasury and Trade Solutions, said:”The gpi pre-validation pilot is a significant step forward for the payments industry in building a platform on which banks can interact with each other in real-time, both pre-transaction and post-transaction. It demonstrates how banks can leverage SWIFT gpi to continue to transform cross border payments. This service is an enabler of our goal to provide real-time ubiquitous cross border payments by allowing banks and our clients to rectify any issues at the point of origination, achieving seamless end-to-end fulfilment along the payments delivery chain.”

Christof Hofmann MD and Global Head of Payments and Collection Products, Deutsche Bank, Germany, said: “We believe the gpi pre-validation service will add significant value to our clients, increasing the overall gpi client experience. Beneficiary account validation addresses an important pain-point in cross-border payments; it will help increase STP ratios while reducing fraud and exception handling.”

Together with the pilot banks, SWIFT will agree the global industry specifications for the gpi pre-validation service by the end of 2018, while the pilot is set to commence in early 2019. „Over time, the service will be expanded to provide up front transparency on fees, based on the exact routing of the payment message. This will give payment originators and beneficiaries complete transparency and predictability on costs, routes and expected delivery of their funds.”, Swift said.

*The 14 banks taking part in the pilot are: Bank of America Merrill Lynch, Bank of China, Barclays, BBVA, BNP Paribas, Citi, Deutsche Bank, E.SUN Commercial Bank, ICBC, J.P. Morgan, National Australia Bank, Piraeus Bank, Societe Generale and Wells Fargo.