SWIFT Released Paper About About Shifting To Global Payments Innovation

By Rishma Banerjee

SWIFT which has recently released a new paper “Payments: Looking into the future” will be utilising blockchain pending a successful proof of concept with R3 as was confirmed by their CEO Gottfried Leibbrant and CMO Luc Meurant in the paper. SWIFT is also expecting a more open model of financial services and apps within the banking ecosystem.

GPI (Global Payments Innovation) is to be the roadmap that SWIFT will supposedly be following, which will ideally lead them to their goal of instant, global 24/7 payments from any bank account to any other bank account. It has also been confirmed that blockchain (distributed ledger technology – DLT) is going to be at its core.

The company clarified:

“Importantly, we don’t think that cross-border payments challenges should be solved for with closed loop systems. Doing so would easily solve for a subset – or multiple subsets – of participants, but value needs to move everywhere – from every account, to every account. Loops create barriers and friction; they reduce fungibility and portability, they limit competition and they fragment liquidity.”

SWIFT and its community-created GPI will be setting three key foundation stones.

1. The introduction of a humble tag – a unique transaction identifier which will accompany every payment throughout its trajectory,
2.  tracker which will be following these payments along their path and reports back on their status, and
3. configuring new cross-border convention under which banks commit to process payments from ordering customer right through to end beneficiary within tight timeframes visible to their clients.

It must be noted that more than 55% of SWIFT cross-border payments are already made through GPI, moving more than 40 trillion US dollars’ worth of payments across borders.

As was earlier reported by us last week, MoneyGram has announced that they will be collaborating with Ripple that involves an investment of up to $50 million. As per the deal, MoneyGram will be using Ripple’s XRP technology to handle cross-border transfers of digital funds for at least two years. This has prompted Swift to make this new move and they are now predicting that every cross border payment will be a GPI payment, in another two years.