Build or borrow? For today’s payment service providers, accelerating payments across borders means either developing new infrastructure, or making use of existing rails, to move money around the world.
This week, SWIFT picks the latter, while JPMorgan Chase grows its initiative using blockchain to make cross-border transactions, and Form3 announces a new international payment services that connects banks with global small business payments capabilities via application programming interface (API). Below, PYMNTS looks at the latest news in cross-border payments innovation as industry players complete, collaborate and innovate.
SWIFT gpi Links Into Real-Time Payments
Payments messaging firm SWIFT announced Monday (Sept. 23) that its gpi service can now be integrated into domestic real-time payment systems, enabling banks to wield gpi for real-time cross-border payments.
According to SWIFT, the capability focuses on boosting transparency of foreign exchange and other fees for payers while promoting ubiquity by operating a real-time payments service on existing rails.
“Integrating gpi, through banks, into domestic real-time payment systems reuses existing cross-border and domestic payments infrastructure, minimizing implementation costs and avoiding the complexities of adopting new infrastructure,” SWIFT said in its announcement.
SWIFT has already trialed the gpi integration into Australia’s New Payments Platform to facilitate a transaction between Australia and China in 18 seconds, it noted, while tests with Singapore’s FAST (Faster and Secure Transfers) service, which involved interaction between 17 banks in seven different countries, similarly saw a payment settled in just 13 seconds.
Other trials have been conducted with the European Central Bank and a group of 19 banks using the TARGET Instant Payments Settlement (TIPS) platform, and with other markets around the globe.
“At SWIFT, we are creating a future in which cross-border payments will be as convenient as domestic ones,” said SWIFT Head of Banking Harry Newman in a statement. “It is time for the whole community to come together and seize this opportunity and establish a global real-time payments service.”
Deutsche Joins JPMC’s Blockchain Initiative
Last week, Deutsche Bank became the latest financial institution to join JPMorgan Chase’s blockchain initiative, the Interbank Information Network, which aims to accelerate and streamline cross-border transactions via mutually accessible ledger.
The technology is a new take on the correspondent banking network, a legacy system that critics say hampers visibility and traceability into payments as they bounce between financial institutions around the world.
Chase’s use of blockchain to facilitate cross-border transactions is also a reflection of the delicate balance between bank-FinTech collaboration and competition.
“Our competitors are not just other banks,” said Deutsche Bank global head of cash management Ole Matthiessen in an interview with The Financial Times. “It’s also new players in the market. We need to become efficient enough to provide seamless real-time and digital process.”
Form3 Launches International Payments Business
On the collaboration side of the spectrum, API payments technology company Form3 announced Monday the launch of its International Payments Business. The company will use its new service to connect banks and financial institutions to its API real-time platform, allowing those FIs to integrate the capability into their own offerings and products.
According to Form3’s announcement, the service is part of its partnership with Ebury and will focus on banks’ small and medium-sized business payment services.
“Our goal is to dramatically improve access to payment services for SMEs worldwide,” said Form3 Head of International Payments Fabrizio Zanollo in a statement. “Working with our FI partners, we will enable customers to access international payments (pay-in and pay-out) FX and trade finance, and settle in up to 140 currencies globally from a single API.”
Their collaboration coincides with Form3’s announcement that the firm, in partnership with Ebury, have secured about $6.2 million in grant funds, awarded by the U.K.’s Banking and Competition Remedies fund.