This announcement posted at Finextra is yet another sign of the change in times as Swift continues to adapt to the technology challenges put forth by fintechs in alternative networks and methods for the cross-border space, as the bank cooperative evolves into delivering broader services. We first saw this with the Swift gpi initiative, which will eventually retire the legacy network, sometime after the transition to ISO 20022. We then saw the pivot to transaction banking support services in 2020, and although we have no data as to the success of this initiative, we assume reasonable take-up given the thousands of institutions in the Swift ecosphere.
So now we have the introduction of a cross-border remittance service for consumers and small businesses, which they are calling Swift Go. This marks a post in the ground by banks to advise the money transmitters and fintechs that they will not continue to go quietly into the night by ceding this space.
There is also a great deal of emphasis being placed on cross-border payment improvement by BIS and regulatory bodies. In any event, we have not received a briefing but expect that Swift gpi is the network and perhaps a layer of service(s) added in. So expect more innovations in the lively cross-border payments space.
‘Seven global banks – BBVA; Bank of New York Mellon; DNB; MYBank; Sberbank; Société Générale, and UniCredit – which collectively handle 33 million low-value cross-border payments per year, are already live with the service….Using tighter service level agreements between institutions and pre-validation of data, Swift Go enables banks to provide their end customers a fast and predictable payments experience with upfront visibility on processing times and costs….Stephen Gilderdale, chief product officer, at Swift, says: “Swift Go is a direct response to the needs of small businesses and consumers for fast, easy, predictable, secure and competitively priced cross-border payments. Our new service will allow banks to compete effectively in one of the fastest growing segments of the payments market, delivering a seamless experience for their customers.”….Swift is promising competitive pricing, with processing fees agreed between financial institutions upfront in order to provide customers with full transparency on costs….Pricing will be key if the correspondent banking industry is to snatch back business lost to a host of non-bank money transmitters, many of whom rely on Ripple’s alternative payment rails to disburse funds.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group