The Federal Reserve Banks in the United States and The Clearing House have developed local market practices for their participants that use the SWIFT global payments innovation (gpi) service. SWIFT gpi gives to banks the ability to offer faster, more transparent and traceable cross-border payments, with features that include same-day use of funds and end-to-end payment tracking. The service was launched last month.
Because gpi payments carry additional information to flag them as gpi, member banks need a local market practice for the payments to be exchanged through local clearing systems that do not use SWIFT. Now that these practices are in place for the major USD clearing systems, efficiency of tracking will be greatly increased, SWIFT said.
“By using a market practice to include a gpi tracking reference in the Fedwire Funds Service messages they send, our participants that are also SWIFT gpi members can be in a position to extend the benefits of SWFT gpi to funds transfers that are made through the Fedwire Funds Service,” said Nick Stanescu, senior vice president and head of payments product management for the Fedwire Funds Service and the National Settlement Service.
“The Clearing House is pleased to join the world’s payments market infrastructures in providing greater transparency in payments through SWIFT’s gpi initiative,” said Jim McDade, senior vice president of product management at The Clearing House. “Our commitment includes aligning CHIPS formats with the gpi U.S. market practice, which will ensure payments carry the required information needed for the tracking of domestic and cross-border wire payments, from origination through to the credit to the ultimate beneficiary’s account. This transparency will improve efficiency, security and customer service.”
SWIFT will continue to engage other infrastructure communities for future gpi tracking, including the Bank of Japan Financial Network System and SIX’s Swiss Interbank Clearing.
– Adam Fusco, editorial associate