SWIFT to Eliminate Frictions in International Payments by Upfront Verification of Account details in Real Time

  • Payments , Security
  • 08.07.2021 09:00 am
  •  New service enables real-time payment validation to reduce errors, exceptions and costs caused by wrong or missing beneficiary information
  •  Removes a key area of friction in cross-border payments, supporting SWIFT’s strategy for seamless, instant account-to-account transactions
SWIFT today announced the go-live of a service that will enable banks
to verify payee account details before an international payment is sent, removing a key point of
friction in cross-border transactions. The new Payment Pre-validation service is a core building
block in SWIFT’s strategy to drive instant and frictionless transactions worldwide.
Most cross-border payments are processed without issue, but one of the leading causes for
those that fail or lose time is incorrect beneficiary information – from misspelled names to
transposed account numbers. And because they are detected late in the process, these issues
can be among the most time-consuming and costly to resolve. SWIFT’s Payment Pre-validation
service tackles this problem by allowing a sending bank to confirm account details, via an API,
with the receiving bank from the very beginning of the process so that any data or account
problems are identified right up front. This check is similar to what already occurs in some
domestic markets except the SWIFT service will go much further — solving the issue for up to
11,000 institutions and 4 billion accounts in 200 countries.
SWIFT developed the Payment Pre-validation service in close cooperation with financial
institutions, and a number of major global banks have already signalled their commitment to
the service. SWIFT plans to continue innovating the service, and over the coming months will
offer additional checks based on reference data encompassing millions of transactions to
further predict, at the point of initiation, when a transaction may potentially run into friction points
along the way.
Over the next two years and beyond, SWIFT is transforming its platform to enable instant and
frictionless payments anywhere in the world, aiming to significantly improve end-to-end
efficiency, reduce total costs, and to create services that equip financial institutions to capture
growth and create new, differentiated customer experiences. Payment Pre-validation is one of
many such services to come that will support the first platform release in November 2022.
Stephen Gilderdale, Chief Product Officer, SWIFT said: “SWIFT’s strategy to enable fast
and frictionless payments takes a major step forward with the launch of this service. Payment
Pre-validation will bring end-to-end efficiency, enabling our customers to provide better, faster
and new services to their own end clients.”
Thomas Halpin, Global Head of Payments Product Management, HSBC, said: “Prevalidation
is an important step in helping corporates to make simpler, faster and more secure
cross-border payments. This feature will ensure customers can send payments in confidence,
and the increased security brings benefits not just for customers but for the entire payments
George Doolittle, Head of Global Payment Services, Corporate and Investment Banking
Group, Wells Fargo, said: “Wells Fargo is pleased to be an early participant in SWIFT’s prevalidation
solution as we continually seek ways to improve the global payment services that we
bring to our clients. The transformative value of SWIFT’s Payment Pre-validation service is the
decrease in friction, resultant cost efficiency and improved client experience of understanding
and correcting format issues before they result in a repair or inquiry at the beneficiary’s bank or
creditor’s agent which can bring great benefits to our industry. This service addresses a key
challenge in the cross border payment industry.”

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