Universal confirmations to transform the way we do business

23 October 2019

Experts from Societe Generale, Roche, ACI Worldwide and SWIFT came together at Sibos in London to explore how universal payment confirmations will benefit global trade.

November 2020 marks an important milestone for global payments. By this time every SWIFT customer cross-border payment (MT 103 on FIN) will require a confirmation that the funds have been credited to the end beneficiary’s account. In doing so universal confirmations will bring the global financial industry a step closer to creating a completely seamless cross-border payment experience.

What can businesses expect the world to look like when all payments are confirmed? A panel at Sibos London set out to answer just that. It featured:

  • Jean-Francois Mazure, Head of Cash Clearing Services at Societe Generale
  • Martin Schlageter, Head of Treasury Operations at Roche
  • Craig Ramsey, Head of Real-Time Payments at ACI Worldwide
  • Christoph Albers, Head of Product and Market Strategy for SWIFT gpi at SWIFT

Mandatory confirmations will unlock universal benefits

Martin Schlageter from Roche opened the session by drawing on an analogy with consumers shopping online. Today, even when purchasing an item for $25, he said, customers receive notification of their payment being processed, their goods shipped and finally, a confirmation of delivery.

The same cannot be said of all cross-border payments made by corporates. “How can we send billions of dollars around the world and not have the capacity to see when it arrives? It is unbearable for a large corporate to rely on a system that doesn’t provide payment confirmations. For Roche, it will become a clear requirement to get this confirmation from every bank across the globe as quickly as I get my confirmation from my $25 online purchase.”

Delivering real-time information about the status of cross-border payments has become essential in the digital era, and a core tenet of SWIFT gpi. By implementing this requirement originating banks will receive a confirmation when funds have been credited to the end beneficiary’s account for all payments on the SWIFT network, regardless of whether the banks processing the payment are gpi members or not. 

As soon as you provide transparency on the status of a payment, from an operations standpoint you are reducing a lot of enquires and investigations.

Jean-Francois Mazure, Head of Cash Clearing Services, Societe Generale

From a corporates perspective, Schlageter added, “When we exchange payments with counterparties and they cannot track the payments for some reason, it triggers a time-consuming dialogue with all parties involved.” These dialogues can disrupt the supply chain. With the transparency and certainty afforded by all parties providing universal confirmations, businesses are able to achieve greater capital efficiencies. “This will become a game changer,” Schlageter concluded.

For banks, payment confirmations facilitate better customer relations by reducing the frustrations and operational overheads of having to chase the status of a payment. Confirmations deliver other tangible benefits as well, according to Jean-Francois Mazure of Societe Generale. “As soon as you provide transparency on the status of a payment, from an operations standpoint you are reducing a lot of enquires and investigations,” he said.

Requirements for banks starting in 2020

Providing all parties with visibility and transparency, universal confirmations will allow businesses to know with certainty that their payment has arrived, which in turn will facilitate smoother trade and prevent delays in the supply chain.

“All banks will be able to benefit from real-time tracking information and that will drastically reduce the cost and effort to resolve queries in terms of exceptions and investigations on both the ordering side to address customer enquiries, and beneficiary side in dealing with queries from previous banks in the chain,” said Albers of SWIFT.

SWIFT gpi member banks already have access to full tracking and confirmation features, including visibility on payment statuses, the relevant fees, FX and credited amount. Non-gpi member banks will need to confirm the status of incoming MT 103 payments, whether credited or rejected, as soon as processing the payment but within maximum two business days of the payment’s value date

SWIFT is supporting the community in this transition

A range of automated and manual solutions are being developed to enable banks to confirm payments, namely:

  • The Basic Tracker, a free tool which allows non-gpi members to easily confirm payments manually. It also includes basic search and tracking features and provides a smooth upgrade path to the full version of gpi for banks that wish to do so
  • Existing SWIFT interfaces, by using automated MT 199 messages to send status updates or, for customers with access to the gpi Connector, by sending API calls
  • New solutions are also underway to provide payment confirmations through the ISO 20022 message standard, as well as a batch confirmation option reducing the implementation effort to a simple end-of-day export file from the payment application.

Third-party vendors are equally supporting the SWIFT community in the adoption of universal confirmations and to ensure a smooth transition. “It’s time to see that consistency and certainty come through on 100% of payments. So that banks’ end users know exactly what is happening with their payments,” said Craig Ramsey of ACI, adding “we are focused on making universal confirmations as simple as possible for your existing environments, in your payment applications at both your head office and your international branches.”

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