B2B Payments

gpi Makes SWIFT Cross-Border Gains

SWIFT has noted that gpi payments make up more than half of its cross-border traffic. The Fed sees marquee tech names pushing for faster payments, and Square circles a banking license, again.

When it comes to corporate transactions (and, well, payments in general), two inexorable trends include speed and distance. In this case, distance applies to cross-border activity.

SWIFT, the messaging service, said earlier this week that its SWIFT global payments innovation (gpi) service is being used for a majority — as in 55 percent — of its cross-border traffic. The results come across hundreds of billions of dollars’ worth of payments each day, and across hundreds of financial institutions (FIs), with the roster including 60 of the largest banks in the world.

“Through gpi, SWIFT and its community have managed to radically innovate the very core of correspondent banking,” said Chief Marketing Officer Luc Meurant in a press release providing the business update, and where universal update is being targeted for 2020.

As has been reported, more than 50 percent of SWIFT gpi payments are made within 30 minutes, and roughly 100 percent are made within 24 hours. Upon universal adoption, the thousands of banks joining the service will be able to offer same-day payments with full tracking.

Separately, tech giants are following on the heels of Target and Walmart in asking the Federal Reserve to boost efforts that would let interbank transfers be settled in real time, around the clock. For retailers, such speed would shorten the length of time between a transaction being made and the funds’ arrival at the retailer.

This time around, marquee tech names such as AppleGoogle and Amazon are voicing support for a real-time payments system to be spearheaded by the Federal Reserve. A trade group representing those names  and PayPal and Square, among others  issued a letter advocating a system that would connect banks and credit unions, with an eye on speedier transactions.

The Fed, of course, has had a request for comment open for a while. Amazon in particular has stated that such settlement options would be a desirable alternative to credit and debit cards. Yet, as noted in the American Banker, some stakeholders seem to disagree with that initiative. Banks have said that the Fed would be working in competition with existing processes.

“If the Federal Reserve were to offer a service that was not interoperable, the effect on the faster payments marketplace would be dramatic,” wrote BB&T CEO Kelly King in a comment letter to the Fed. King argued that banks would have to use both systems, which would lead to inefficiencies and added expenses.

In company specific news, Square has refiled an application for a banking license for Square Financial Services. In its Wednesday (Dec. 19) announcement, the company said the application is with the Federal Deposit Insurance Corporation (FDIC).

The application is for a special industrial loan company license. Reuters reported that the license allows non-traditional finance firms to collect government loans, and that the bank would be chartered in Utah. The move comes after the company applied for a charter last year, but had withdrawn that application. Regulators had said a refiling would be permitted.

CNBC also reported that Square has supplied additional documentation on its products and services, and proposed banking offerings.

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