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Plans revealed for real-time cross-border payments system between banks in Australia, China, Singapore and Thailand

Many countries in Asia-Pacific are developing domestic real-time payment systems. Examples include PayNow in Singapore, PromptPay in Thailand and the New Payments Platform (NPP) in Australia. But cross-border payments are still expected to take days.

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) announced that it has held exploratory talks with a group of banks from Australia, China, Singapore and Thailand to develop a cross-border real-time payments service in the Asia Pacific region, based on SWIFT gpi.

These banks, which are on the SWIFT gpi platform, include ANZ, Bangkok Bank, Bank of China, China Construction Bank, China Guangfa Bank, Commonwealth Bank, DBS, ICBC, Kasikornbank, NAB, Siam Commercial Bank, UOB and Westpac.

During the initial workshops, the group agreed that the services should be rolled out in three phases. In the first phase, a new real-time gpi sub-scheme is being introduced to facilitate real-time cross-border payments between gpi banks in the region. This will build on the success of SWIFT gpi in reducing cross-border payment times from days to minutes. Phase 1 is already live.

During Phase 2, the SWIFT gpi rails will be extended into existing real-time payment systems within each recipient country, namely Singapore’s Fast and Secure Transfers (FAST; PayNow utlilises the FAST infrastructure), Australia’s NPP, Thailand’s PromptPay and China’s CIPS or China international payments system. Phase 2 is targeted for Sibos 2018 in October 2018.

This will ensure that “inwards and onwards” payments can be settled in real-time in each of the four markets, irrespective of whether the final beneficiaries hold accounts at banks that are connected to SWIFT or that are using gpi. 

A third phase would aim to link domestic real-time payment systems via SWIFT gpi to facilitate full cross-border real-time payments between their respective customers. This aims to enable both sending and receiving account holders to benefit from a full real-time payments experience – again independently of whether they hold accounts at banks that are connected to SWIFT or using gpi.

Following the workshops, SWIFT and participating gpi member banks have started work on defining a common cross-border real-time scheme that banks can review and test. The design of the new service will build on existing SWIFT gpi service rules to help resolve additional business process frictions in the payments chain.

SWIFT has also commenced discussions with the NPP in Australia to enable SWIFT gpi payments to be processed onwards through their newly launched domestic real-time payments system. SWIFT has helped to design, build and deliver the NPP, and is playing a key role in operating the infrastructure for the NPP.

Such a service would eventually enable a complete real-time cross border payments experience for all bank customers in the region, going beyond gpi banks and their customers.

Eddie Haddad, Managing Director of SWIFT Asia Pacific said: “With the widespread adoption of domestic real-time payments systems in the region, a cross-border real-time service is both a natural extension for SWIFT gpi in Asia Pacific and a real game-changer for bank customers. SWIFT is uniquely positioned to help our customers leverage their existing investments in infrastructure, to standardise connectivity across multiple markets and to drive efficiencies in support of cross-border trade, facilitating further integration in the ASEAN region.”

Launched in 2017, gpi accounts for nearly 10% of SWIFT cross-border payment traffic and is enabling more than a hundred billion dollars to be transferred across the world rapidly and securely every day. More than 160 banks, including 48 out of the 50 top banks on SWIFT, have signed up to the service, sending payments across 350 country corridors - including major corridors such as USA-China, where gpi already accounts for more than 30% of payment traffic.

“SWIFT gpi already reduces cross-border payment times to minutes, even seconds and indeed nearly 50% of gpi payments are already being completed in less than 30 minutes”, added Mr Haddad. “This new scheme will both further speed up those payments, and extend the reach of the gpi capability far deeper into domestic markets, driving radical change in the cross-border payments market across the region. We look forward to seeing this work in practice and to more countries, and banks joining the new service.”

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