The second payments roundtable - KPMG Nederland
close
Share with your friends

The second payments roundtable: future-proofing cross-border payments

The second payments roundtable

The cross-border payments market is in turmoil, largely driven by technological advancements. Blockchain-based alternatives and Asian platform players are eager to take their share in cross-border payments. This changes the fundaments of cross-border as we know it. Are you ready to grasp the opportunities of tomorrow by beating the complexity of today?

Contact

Paul Koetsier

Senior manager

KPMG Nederland

Contact

Gerelateerde content

Three speakers summarize

Wim Raymaekers, global head of Banking market for SWIFT, presented on SWIFT gpi and its background. Hereafter the lead product manager cross-border payments of Rabobank, Els Valent, provided a view on SWIFT gpi through the lens of a bank. Lastly, equensWorldline's Elmira Jubanyshkaliyeva shared her vision on cross-border payments from a processor's perspective.

People sitting in a meeting room looking at the screen

'How does SWIFT gpi improve cross-border payments?' - Wim Raymaekers (SWIFT)

Wim presented the current global payments playing field. He used an illustration in which banks are chased by telcos, startups and FinTechs. These are in turn closed in by BigTechs. And the complete playfield is heated up by technologies like blockchain. The cross-border payments market as we know it needs to change to fight against these challengers.

As a reaction to this trend, SWIFT gpi started to tackle main weak points from a corporate treasury perspective: in transparency of fees, lack of confirmation of credit by the beneficiary banks, unclear payment status, and limited room for remittance information. SWIFT uniquely decided early on that it would utilize proven technologies with the current setup. This is contrary to a completely new setup, including new technologies such as blockchain.

SWIFT gpi, in essence, is a set of additional agreements between participants, one of them being an agreement to provide same-day value for payments received before cut-off time with the addition of a unique tracking ID (UETR) that is sent with the payment messages. Gpi implementation is already a success nowadays. Using the tracking ID, SWIFT sees that over 50% of the cross-border payments is credited within 30 minutes today.

In terms of further developments, 2018 marks the year that all payments are trackable. 2020 will be the year in which payment confirmations are delivered for all payments.

'What are the challenges of providing SWIFT gpi for corporates?' - Els Valent (Rabobank)

Els is responsible for Rabobank's cross-border payments offering. She discussed the implications that the integration of SWIFT gpi has for banks. Rabobank views SWIFT gpi as a no brainer with the functionality of gpi as a step in the right direction.

End-to-end implementation is a challenging process that requires substantial effort. Rabobank is live on SWIFT gpi for three of its foreign entities. The Dutch entity is expected to go live in the course of 2019.

Especially, corporate treasurers have shown great interest in SWIFT gpi's payment tracker, confirmations, and future functionalities. A next step in cross-border payments would be to provide payment end-to-end processing information before the transaction is initiated. This way the exact processing date, time, and costs will be predetermined, and subsequently confirmed.

'What re the alternatives next to SWIFT gpi?' - Elmira Jubanyshkaliyeva (equensWorldline)

Elmira first elaborated on the traditional correspondent banking model of cross-border payments that lasted for decades. Afterwards, she presented the new and complex dynamics in cross-border payments by introducing four development directions to improve cross-border payments: disruptive alternatives, FinTech offerings, incremental service renewal, and regional cross-border real-time payments.

The first development direction are 'disruptive alternatives' such as Distributed Ledger Technology. Disruptive technologies such as blockchain challenge the original correspondent banking model. Ripple for example, is able to provide an instant cross-border payment transaction bypassing the SWIFT network.

The second development are FinTech services, such as TransferWise. This party does not guarantee quick settlement, but offers a low transaction fee for cross-border payments.

The third development refers to players that incrementally renew their services. These players further improve existing propositions e.g. through SWIFT gpi.

The last development consists of regional cross-border real time initiatives. This group contains initiatives where multiple countries collaborate to provide frictionless payment transactions between the country members.

Concluding

Every day, the cross-border payments market evolves to remove friction and to improve customer experience. The coming years banks and corporate treasurers find themselves in a position where they can conduct business as usual, while at the same time being presented with alternative cross-border payment solutions.

Neem contact met ons op

 

Wilt u een offerte van ons ontvangen?

 

Offerteaanvraag (RFP)