Fintechs are democratising access to a new era of payments visibility

As anyone involved in product development will tell you, the push towards instant, more transparent cross-border payments is growing stronger with every day that passes. SWIFT’s ‘Global Payment Initiative' (gpi) is one of the more recent innovations that has real potential in helping businesses realise this goal. By connecting every party in the payment chain through a single cloud solution, it dramatically cuts the friction and opacity existing in the traditional international payments system. The most interesting aspect of this new initiative, which doesn’t get spoken about enough, is that it’s not just for the traditional players: banks.

SWIFT has realised that a growing share of international payments are not being processed by banks, and that to achieve universal adoption it needs to move beyond its traditional audience of banks. As a result, this new service has been opened up to Fintechs and other payments processors. This is not just a sign of the times but a major step that will ensure that this exciting evolution in global payments is a tidal wave of innovation, rather than a small trickle that never truly permeates throughout financial services.

Indeed, Fintechs will play a vital role in not only accelerating adoption but democratising access to this new standard for global payments, making it easier for businesses and a host of other financial institutions to reap its benefits.

Accelerating adoption of SWIFT gpi

SWIFT gpi transferred $77 trillion in 2019, accounting for 65% of all payments on its network. Although more than a thousand banks have signed up to SWIFT gpi, to achieve global acceptance, they need to embrace more than just the banks.

Making this new standard in payments visibility more widely available has a multiplier effect. It not only means that fintechs can sign up to this service themselves, but can outsource this to other payments fintechs that are SWIFT gpi-enabled. Partnering with these technology providers offers a quicker way for digital banks and other fintechs to offer more transparent payments to customers, avoiding the upfront investment and ongoing maintenance costs of upgrading their payments systems.

As payments become increasingly uncoupled from the banking system, payment platforms offer a way for financial institutions to expedite and meet the end of 2021 deadline for migrating to ISO 2022 – the new-data rich standard for payments messaging that is part of SWIFT gpi.

Putting power in the hands of customers

 Outsourcing international payments to a Fintech does not necessarily mean giving up control of the payments process. In fact, it can actually enhance it.

The new gpi Tracker offers an unparalleled degree of transparency over the entire journey of a SWIFT payment, allowing financial institutions to immediately check the status of a payment mid-flight and to identify where an issue occurred if a payment goes missing. Previously, resolving customer issues could take days, with much time spent contacting each bank in the chain to try to find out where the payment is, why it’s being held up, and when it will be released.

The API delivers an even bigger step-change in the process. The financial institution can maintain control of the process itself, internally, or they can pass it on via their app, directly to their customers. This means the end-user, be that a consumer or a business, will be able to track each of their cross-border payments from within their provider’s app, from the moment they leave their bank account, to the moment it arrives in the recipient’s account, in just the same way as they would a UPS or Amazon delivery.

This opens the door to a world where not only banks have visibility over the payments journey, but all Fintechs that are increasingly handling a greater share of international payments, and their customers as well. The ability to be more transparent in the tracking and tracing of payments saves time, effort and ultimately, money.

More than this, as customers demand greater visibility over payments, being able to offer this service will become a commercial imperative for all financial institutions if they are to continue attracting and retaining customers. For this reason, it is vital that SWIFT gpi, and the new standard it sets for payments visibility, is not just enjoyed by banks and their customers but Fintechs and all participants in the payments ecosystem.