EBA Clearing, SWIFT and The Clearing House (TCH) have completed a proof of concept as part of a new initiative, Immediate Cross-Border Payments (IXB), to make cross-border payments as seamless as the fastest domestic payment options.
IXB demonstrates the ability to synchronise settlement in one instant payment system with settlement in the other and convert real-time messages between both systems.
According to SWIFT, the concept could be expanded to additional currencies and is also replicable for more liquidity-efficient high-value payments.
The IXB initiative has had 11 banks contribute to the design, with seven banks – Bank of America, BBVA Group, Citi, HSBC, Intesa Sanpaolo Bank, J.P. Morgan and PNC Bank – participating in the proof of concept. The banks successfully exchanged payment and confirmation of receipt messages.
SWIFT says the initiative responds to the rising expectations of consumers and businesses who have experienced the benefits of domestic real-time payments and now have similar expectations for cross-border transactions.
The IXB proof of concept shows that existing regional instant payment systems can be leveraged for cross-border payments, SWIFT explains.
Additionally, it shows that financial institution participants of all sizes could be provided with access to a solution for cross-border payments without the need to build and connect to a separate network.
By taking advantage of existing infrastructure, technology and standards, SWIFT says IXB can help to satisfy, in the near term, customer expectations across the globe for a simple and more transparent way to send cross-border payments.
“By leveraging the RTP network in the United States and RT1 in Europe, along with ISO 200022 message formats, IXB demonstrates that a faster cross-border payments capability is possible and can be delivered using existing technology,” says Russ Waterhouse, executive vice president for product development and strategy at The Clearing House.
Erwin Kulk, head of service development and management at EBA Clearing, comments: “IXB demonstrates how the current ecosystem of cross-border payments may be enhanced and made suitable for new high-volume 24/7 business. In combination with an international request to pay, its potential applications would be limitless.”
David Watson, chief strategy officer for SWIFT, adds: “Linking market infrastructures and financial institutions is a fundamental pillar of our strategy to enable instant and frictionless transactions around the world, and one of the key building blocks in the CPMI’s global roadmap on enhancing cross-border payments.”
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