Since the onset of various real-time payments systems being launched on a regular basis across various global markets, there were 56 active real-time payments systems, as of the last time I checked. Because these were/are all domestic (more accurately single currency) systems, it was logical to expect that eventually real-time cross-border payments would follow.
We are starting to see this eventuality and expect that, in the next couple of years, it will be a more commonplace thing in certain corridors. This release at BBVAs site announces the successful pilot of integrating SWIFT gpi with the U.K.’s faster payment scheme:
‘The BBVA Group participated in this new pilot, together with five financial institutions in Europe, North America and Asia-Pacific. The goal was to test the integration of SWIFT gpi with the British instant payment platform ‘The Faster Payments Scheme’ (FPS)….The pilot was successful and showed the global potential that exists to eliminate the time zone restrictions, which will no longer be an obstacle to payment processing. It also demonstrated that gpi SWIFT’s integration with instant payment systems is globally scalable….“With the integration of SWIFT with the Faster Payment chamber, we are going to further enhance customer experience, adding real-time processing of payments in British pounds to the benefits gpi already offers, tracking from start to finish and transparent costs,” explains Raouf Soussi, the head of Corporate Payment Strategy at BBVA.’
So theoretically, if one were initiating a cross-border payment from the U.S. to the U.K. through a BBVA account using SWIFT gpi and a wire transfer, the payment can connect to the U.K. faster payments system and settle in local currency in real-time. We assume that it would be a BBVA account on the receiving end and that currency conversion occurred as well. So the cross-border space continues to see innovation on a regular basis.
‘BBVA has supported this initiative since the onset, making it the first bank in Spain, Mexico, Peru and Turkey to offer this service, and the first Spanish bank to give its customers access to all the information on their international payments. BBVA is now offering this service on its channel BBVA net cash, on the SWIFT FIN (MT101) channel and on the direct ‘host to host’ channel, through which its customers can enjoy the benefits of this initiative.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group