With the digitalization of the financial industry, corporate treasurers are putting pressure on financial institutions to offer faster and convenient payments across borders. They are also demanding more granular and transparent data of the payment deductions and credits.
Global Payment Innovation or GPI has been launched by SWIFT to improve the international banking experience of customers worldwide. But what are the improvements we are referring to?
International transactions have always been concealed in mystery. Having a considerable number of members from different countries with a shortage of common standards makes international transactions difficult to handle. Not only is the transactional information tricky to estimate, but also handling any arising incidents have been manual for years. And for a long time now, banks have been trying to make cross-border payments smooth and fast.
So what SWIFT GPI changes? Let’s find out!
What is SWIFT GPI?
SWIFT GPI is a collaborative programme aimed at enhancing cross-border payments. The goal is to introduce new standards by connecting all parties to the end-to-end payment chain. Moreover, by using a cloud-based solution, SWIFT GPI intends to improve transparency, speed and traceability for end customers without compromising compliance obligations or credit and liquidity risk requirements. For consistency, it works by following the business rules outlined in the multilateral service level agreements between participating banks.
SWIFT GPI has responded to what customers have been asking for by transforming the way international payments are processed:
- When is the payment carried out?
Payments are made on the same day the payment process begins (as enabled by operating hours differences), helping to establish commercial associations with suppliers. Undoubtedly, greater speed is among the SWIFT GPI’s strengths.
- Where is the payment?
Due to Unique end-to-end Transaction Reference (a reference connected with every payment), the status of the payment across correspondent banks can be checked anytime. And the confirmation finalizes the success of the deposited payment in the beneficiary’s account.
- How much does making payment cost?
SWIFT GPI involves transparency hence, the end-user will get the cost breakdown involved in the payment with the exchange rate costs.
- How to identify payment?
The payment information throughout the process remains unchanged and uniform. So, both the issuer and recipient receive the same information to help identify the payment. It has only been made possible by the commitment of involved banks in SWIFT GPI.
Benefits of SWIFT GPI for Corporates & Financial Institutions
SWIFT GPI has been designed to benefit both corporate and financial institutions. So let’s take a look at both.
- For corporates, SWIFT GPI offers same-day funds availability, transparent fees, end-to-end tracking of payments, and transmission of unaltered payment information that helps corporates to improve their capability to grow and conduct their businesses internationally.
- SWIFT gpi enhances the value proposition that can be offered to customers by banks. With SWIFT gpi, financial institutions can enable high-value commercial transactions to corporate clients.
Takeaway!
By embracing the new standard in cross-border payment as a financial institution, you can send and receive funds faster and secure than ever to anyone with complete transparency over the payment at any moment. So, without any further ado, you should also start to indulge SWIFT gpi for your application.
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