When analysing payment exceptions on the SWIFT network, we found that 72% were the result of formatting errors, account issues and invalid data. So, we set out to solve this – reducing delays so you can keep your customers happy. Mireia Guisado Parra, Pre-validation Product Owner at SWIFT, explains how.
Whether a multinational corporate, small business or an individual sending money to family abroad, the world heavily depends on the smooth flow of transactions every day. Payments travel across borders, through jurisdictions and in and out of accounts, but throughout this journey delays can occur. These create friction, sending ripples of disruption through our daily lives. They stop shopkeepers from getting the supplies they need on time, impact international supply chains and prevent loved ones from receiving the funds they need, when they need them.
While there are many causes of this friction, including carrying out essential compliance checks and the limitations of legacy technology, we found that 72% of payment exceptions on the SWIFT network are the result of formatting errors, account issues and invalid data. And that can be frustrating, as many of these errors could be avoided – all that’s required is that payments are checked or ‘pre-validated’ before they’re sent so that mistakes can be fixed immediately instead of later down the line. This saves time, reduces delays and most importantly gives customers the best payments experience possible.
How does Payment Pre-validation work?
We’ve always sought to make cross-border payments more predictable – reducing uncertainty over when they’ll reach their destination. Implementing gpi was a huge step forward in making this vision a reality, but we’re far from finished. Payment Pre-validation builds on these achievements and adds an extra layer of reassurance when it comes to sending cross-border payments.
APIs sit at the core of this solution, offering a real-time gateway to rich data that can be used to verify and validate whether payment information has been inputted correctly. This includes checking whether the beneficiary account is open and ready to receive funds, and that the inputted name matches the one on the account.
The data we use is sourced from our community of over 11,000 banks, corporates and vendors, but also draws on regulators and central banks to ensure that it is of the highest quality. So, when you pre-validate your payment you can be sure that you’re in safe hands.
While some individual countries have already implemented pre-validation solutions, these lack standardisation and can vary greatly depending on where they operate. What’s missing in this space is a solution that spans the entire industry – one that works on the same principles and standards whether you’re pre-validating payments in London or Lisbon.
APIs: Unlocking endless possibilities
As we’ve already mentioned, Payment Pre-validation uses APIs to source high quality data in real time. But APIs have another use case here.
They also give banks the tools they need to build pre-validation into their payments process, however they see fit. By implementing it into their front-end, their customers can gain real-time visibility on the status of their payment information before they send it. No more surprises – just peace of mind, especially when transferring larger amounts around the globe.
In the same way that gpi transformed the visibility of cross-border payments, Payment Pre-validation will revolutionise the payments experience for our whole community. The service doesn’t just offer peace of mind for high-value payments. It can also be used to pre-validate consumer and small business payments too, so you can delight all your customers.
Be part of our frictionless future: Join the community today
So far, almost 100 banking groups have joined our pre-validation community, using the service to eliminate errors and mistakes in their payment messages. They’re already benefiting from the rich data we provide, and that data will only get richer as more users sign up.
And we have plans to keep evolving Payment Pre-validation. We’ll continue to grow our community, introducing new features that enhance the scope of the service and provide more and more value. These include a further expansion into the world of financial crime compliance and fraud prevention, and increased fee predictability.
So why not get onboard? We’re on our way to turning our vision for a frictionless future into a reality, and we want you to be a part of it.