Future of payments predicted by SWIFT

SWIFT has documented its views on the future of payments in a landmark paper titled ‘Payments: Looking to the future’.

The financial messaging service has set out its views on the future of cross-border payments in order to support the community at a time when payments are becoming evermore complex thanks to the increase in cross-border flows, new technology enabling dramatic improvements and end-customers demanding a better customer experience.

Through the paper, SWIFT is expressing an aim of making cross-border payments as seamless and convenient as domestic ones and making them instant, accessible and ubiquitous.

Leading the ambition

The paper quotes: “With goods and services moving more quickly and across greater distances than ever before, value needs to shift further, faster. Value transfers must be friction-free. Bank account to bank account. They must also be safe, secure and compliant. While banks sit at the center of this, the core architecture is key.

“It must be open and trusted, innovative and resilient; its reach must be ubiquitous and its operations robust. It must enable smart, embedded, instant payments, 24/7 from every account to every account, everywhere. It must support banks in this journey.”

SWIFT feels this vision is achievable through the following elements:

1. A new core infrastructure
2. gpi as the new standard
3. Not just real-time, but round the clock services
4. Unlocking value, from every account to every account
5. Improving ease and experience – for all
6. Smarter payments
7. Reducing duplication and discover new efficiencies, without compromising on banks’ compliance
8. Always on, always connected, always instant
9. A trusted network, with transparent membership rules and strict security – and shared, open standards
10. Harmonization of API standards
11. Connectivity extended exponentially to provide smoother payments experience
12. Being open to new technologies
13. Earning trust, every instant
14. Ensuring endpoint security

Co-operation is key

SWIFT feels that the cooperation by all players in the community is important, because the openness and universality of the envisioned system are unique. The more widely adopted the convention for moving value, the easier the circulation of value – and the more the convention will be used.

Banks are key in SWIFT’s ambition of engineering a payments revolution. The paper says: “Those that can move faster, will be able to move faster; subsets of participants may want to forge ahead with projects and will be enabled to do so, but everyone will have to progress in payments.”

Tremendous effort

With this requirement made clear, SWIFT has urged all the stakeholders to work together

The paper concludes: “The foundations are laid. The building blocks are already constructing that new future. Key participants are working with us to move to deliver the future of payments. We know this realization is far from trivial. But maintaining the privilege of providing payments is something that has to be earned, and while staying behind is being left behind, moving ahead is getting ahead. It will require a tremendous effort from SWIFT, from market infrastructures and from banks, as well as from fintechs – which is why we aim to make it as seamless as possible for smaller participants, and as opportunity-rich as possible for those with bigger ambitions. We’re in this together, revolutionizing an industry and a service to deliver value today and tomorrow”

Last week, SWIFT reiterated its call for aligned global standards in the global FX market to be introduced in order to help remove barriers that hinder the exchange of information and to enable straight through processing. Three months ago, SWIFT joined forces with payment industry experts to come up with guidelines for the implementation of ISO 20022 for cross-border payments.