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Plans revealed for real-time cross-border payments system between banks in Australia

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.”