This post is about one of SWIFT’s most successful initiatives: SWIFT gpi. The main benefits include transparency, speed and trace-ability of payments and this tends to become the new standard for cross-border payments over the SWIFT network.
All about SWIFT gpi is available here.
Universal payment confirmations by 2020
In this post we will focus on the requirements that become mandatory to all users of the SWIFT network as of November 22nd 2020. By the end of 2020, every financial institution on SWIFT will have certainty their payment has reached the beneficiary.
Please meet UETR: Unique End-to-End Transaction Reference (UETR). It enables full end-to-end tracking of all cross-border payments on the SWIFT network.
All financial institutions will have to send payment confirmations, the confirmation that funds reached the beneficiary account, as of Nov 2020.
Just as SWIFT imposed banks implement the UETR for each payment, regardless of whether they enrolled gpi or not, as of Nov 2020, all banks have to send to the Tracker the MT103 message containing the confirmation of beneficiary account credit, for each incoming cross-border payment.
Such a confirmation message needs to include: currency date, status code, type of currency and the amount or, if there’s reason for rejecting the payment, the “reject” code. These confirmations need to be sent preferably immediately after crediting the beneficiary account, or same day, or at most two days after the currency date mentioned in the received MT103.
For more information and examples of confirmation messages, please check the confirmations rulebook published by SWIFT on 07.06.2019.
There are several channels via which the confirmation message can be sent:
- Via the Basic Tracker (BIC) interface – manual creation of the confirmation message. This interface is available as of 17.11. 2019.
- Via MT199 message – automatically fetched from back-office applications who can create the message.
- Via APIs – this method requires using the Tracker API component of SWIFT gpi.
- Via ISO20022 message – documentation to be published by SWIFT in november 2019.
These changes impact internal processes, without making use of the benefits of the gpi service. Therefore, we strongly recommend that when implementing these changes, to also on-board to SWIFT gpi. The project is a complex one, and it would be a shame to miss out on the options gpi unlocks.
To sum up, SWIFT gpi has three main components:
- Tracker – the database where the full passage of a payment can be monitored, offering visibility over the status of a payment, over any charged fees, and over the time needed for each correspondent bank on the chain to process the payment.
- Observer – a dashboard for monitor and control of how each gpi bank meets requirements and response parameters agreed when on-boarding gpi.
- Directory – directory of data about gpi member banks (BIC codes, currencies, cut-off times), facilitating the choice of the most efficient corridor for sending a payment, from a time and cost perspective.
As part of Allevo’s role as SWIFT Business Partner for Romania and Republica Moldova, we are open to meet and open a more in depth conversation about SWIFT gpi.