The new service enables real-time payment validation to reduce errors, exceptions and costs caused by wrong or missing beneficiary information, and supports our strategy for instant and frictionless transactions.
Most cross-border payments are processed without issue, but one of the leading causes for those that fail or lose time is incorrect beneficiary information – from misspelled names to transposed account numbers. And, because they are detected late in the process, these issues can be among the most time-consuming and costly to resolve.
The Swift Payment Pre-validation service helps to solve this challenge by enabling banks to verify payee account details before an international payment is sent, removing a key point of friction in cross-border transactions.
An important step
The Payment Pre-validation service allows a sending bank to confirm account details, via an API, with the receiving bank from the very beginning of the process so that any data or account problems are identified up front. This check is similar to what already occurs in some domestic markets, but our service will go much further — solving the issue for up to 11,000 institutions and 4 billion accounts across 200 countries.
“Pre-validation is an important step in helping corporates to make simpler, faster and more secure cross-border payments,” says Thomas Halpin, Global Head of Payments Product Management at HSBC. “This feature will ensure customers can send payments in confidence, and the increased security brings benefits not just for customers but for the entire payments community.”
Delivering on our strategy
Payment Pre-validation is a core building block in our strategy to drive instant and frictionless transactions worldwide. “Swift’s strategy to enable fast and frictionless payments takes a major step forward with the launch of this service,” says Stephen Gilderdale, Chief Product Officer at Swift. “Payment Pre-validation will bring end-to-end efficiency, enabling our customers to provide better, faster and new services to their own end clients.”
George Doolittle, Head of Global Payment Service, Corporate and Investment Banking Group at Wells Fargo agrees. “Wells Fargo is pleased to be an early participant in Swift’s pre-validation solution as we continually seek ways to improve the global payment services that we bring to our clients.
“The transformative value of Swift’s Payment Pre-validation service is the decrease in friction, resultant cost efficiency and improved client experience of understanding and correcting format issues before they result in a repair or inquiry at the beneficiary’s bank or creditor’s agent which can bring great benefits to our industry. This service addresses a key challenge in the cross-border payment industry.”
Just the beginning
We developed our Payment Pre-validation service in close cooperation with financial institutions, and a number of major global banks have already signalled their commitment to the service. We plan to continue innovating the service and over the coming months will offer additional checks based on reference data, encompassing millions of transactions to further predict, at the point of initiation, when a transaction may run into friction points along its journey.
Over the next two years and beyond, we’re transforming our platform to enable instant and frictionless payments anywhere in the world, aiming to significantly improve end-to-end efficiency, reduce total costs, and to create services that equip financial institutions to capture growth and create new, differentiated customer experiences. Payment Pre-validation is one of many such services to come that will support the first platform release in November 2022.