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The Global Interbank Financial Telecommunications Company (SWIFT) has announced its decision to launch a Global Payment Initiative (GPI) pilot service that aims to compete with the growing threat of blockchain and fintech competing solutions provided by institutions such as Ripple, JP Morgan and Transferwise.
Still in its early stages, the ambitious pilot project aims to "build the foundations of a new integrated and interactive service that will significantly improve the efficiency of the payment process and that will eventually be made available to all 10,000 banks through the SWIFT network ".
A recent GPI test was successfully conducted in October, making immediate cross-border payments with banks in China, Singapore, Thailand and Australia. Equipped to allow fast identification and elimination of errors and omissions in payment data such as missing or incorrect information from the beneficiary or incomplete regulatory information, SWIFT hopes that the GPI payment service will allow fast and uninterrupted transactions, thus reducing delays and costs, as well as improving the customer experience.
Address the threat of Blockchain
With the move, SWIFT has turned its attention to containing the threat of fintech startups based on blockchain that offer the same services at a cheaper price. One of these blockchain projects is the Interbank Information Network (IIN) of J.P.Morgan. Launched in September, it now boasts a membership of over 130 banks, including Satander and Société Générale.
IIN, claims to minimize friction in the global payment process, allowing payments to reach beneficiaries faster and with fewer steps. With its growing membership, IIN promises to banks the ability to quickly resolve errors and compliance issues by sharing information on a distributed ledger.
The SWIFT GPI, on the other hand, uses an API (Application Programming Interface) that allows banks to access each other's data to validate the recipient's account information before the payment is processed. , thus avoiding errors and delays.
An excerpt of the statement issued by SWIFT states:
"Fully integrated with GPI payments, the service will facilitate dynamic bank-bank interaction in real time using APIs to improve the predictability and efficiency of international payments and analyze predictive analytics. it will be complemented by a post-payment survey and reconciliation service that will allow a rapid resolution of the remaining factors, usually arising from compliance or regulatory requirements, which can slow down the payment process ".
The GPI pilot pre-validation service is ready to start in early 2019 with 15 selected banks including J.P. Morgan, Barclays, Bank of China and CitiGroup, among others. According to SWIFT, the service should ensure total transparency to the payees and originators, making the cost, routes and delivery of their funds highly predictable.
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