Off the back of its involvement in Australia’s New Payments Platform (NPP), Swift has entered the instant payments market in Europe, with plans to launch a gateway solution in November 2018. The solution will enable instant payments to be made over the Swift network using a single gateway to connect to multiple instant payments systems across Europe.

Once delivered for Europe, the same solution could support instant payments initiatives elsewhere, says Swift. The European solution is the latest development in Swift’s global instant payments strategy.

Speaking in September last year, the governor of Australia’s Reserve Bank, Philip Lowe, told a parliamentary committee the NPP would enable money to be transmitted “near instantly”.

“When this work is finished, we will be able to make instantaneous payments to one another, with the money transferring between our accounts in a matter of seconds and that is regardless of who we bank with,” Lowe said.

“You can think of it as a central database that might have your phone number in it and a link to your account. You can change that link if you subsequently want to change where your money is going to. It may well make the whole issue of BSBs and account numbers less important.”

Lowe further noted that payments would come embedded with more information than had been the case previously, as it would no longer be restricted to just sending the 14 characters of an account number.

In its role as NPP vendor, Swift provided a payment gateway that is a Swift interface deployed to each NPP participant. The gateway orchestrates clearing and settlement flows between the participating banks and the Reserve Bank and potentially additional flows such as payment initiations that are entered into the system by directly connected value added services. In a white paper published in 2015, Swift stated its role in the development of real-time payments systems would be to provide standards, interoperability and clearing infrastructure.

Christian Sarafidis, chief marketing officer at Swift, says the cooperative’s instant payments strategy has delivered early successes in Australia and would bring “significant benefit” to Swift customers globally. “Initially, the instant payments gateway will provide access to multiple instant payments operators across Europe, and then the plan is to further expand into other markets.”

The instant payments gateway can be used stand-alone, but it also can be integrated with Swift’s Alliance Messaging Hub (AMH), which enables the processing of financial message flows and integration with back office systems. It will be fully compliant with industry standards and specifications.

“Our instant payments gateway is designed to meet the challenges our customers face and forms the cornerstone of our future footprint, enabling access to the forthcoming combined T2/T2S platform,” Sarafidis says.

A market consultation on the future of Europe’s real-time gross settlement (RTGS) services was conducted in the first and second quarters of 2016. Industry consulting is under way to investigate the consolidation of the Target2 and Target2-Securities settlement systems, along with the Target Instant Payment Settlement (TIPS) and Eurosystem Collateral Management system projects…

This is an excerpt. The full article is available in the July/August 2017 issue of the Banking Technology magazine. Click here to read the digital edition – it is free! 

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