Today’s customers expect cross-border payments to come with the same convenience, transparency and predictability as domestic payments. Julie Bolan, head of payments, APAC, at Swift, outlines four ways that payment providers are rising to this challenge.
Cross-border payments are an essential component of international trade. But they’re usually more complex than their domestic counterparts, often passing through multiple countries and regulatory jurisdictions and subject to additional sanctions and compliance
checks. Despite this, today’s customers expect sending money across borders to be just as quick, easy and predictable as domestic payments.
To meet this need, financial institutions around the world are innovating. I spoke to three institutions about what they have been doing to offer their customers the best payments experience possible.
1. Enabling payment tracking
Banks typically receive large volumes of queries from customers seeking updates on the status of their payment and replying to each one can be time-consuming and expensive. Banks are using the tracking capabilities of Swift GPI to provide customers with
updates on their transactions, and several are using it as a foundation for new innovations.
“Swift GPI was a good starting point, and it’s all about extending that,” says Sanjeev Jain, managing director at Citi. As well as giving corporate and institutional clients information about the status of payments, he says the rise of ecommerce is resulting
in a greater focus on retail payments and whether they have reached the end consumer.
To address this, Citi has invested in a functionality called Global Beneficiary Services Payment Tracker, which allows the beneficiary to click on a link and track the status of a payment without the need for a login. “This has really helped us in terms
of improving the traceability of the payment,” Jain adds.
2. Checking payment data upfront to reduce rejects
Payment errors – like a misspelled name or incorrect account number – are a source of delays and frustration for both banks and their customers. But many of them could be avoided entirely if payments are checked for errors before they’re sent using pre-validation
checks.
Real-time global payments platform Nium is one of many financial institutions that recognise the value of these checks, which are to be mandated across Europe as part of the European Commission’s Instant Payment Regulation.
“To help ensure domestic and cross-border payments are correct from the get-go, we’ve launched a new global account verification capability,” says Rohit Bammi, global head of institutional sales at Nium. “The moment a customer enters a beneficiary account
number and bank code, it validates the beneficiary name, so they can be sure the payment isn’t going to be rejected. This can help businesses to eliminate payments failures, avoid fraud, and reduce returns by as much as 90%.”
Citi, meanwhile, has been developing a similar capability by harnessing Swift’s Payment Pre-validation solution and is working with fintechs to
supplement it. According to Jain, this has already resulted in a 70% reduction in customer queries, rejections and returns in one of the bank’s most challenging corridors.
3. Enhancing their offerings
Customer needs are constantly evolving. To continue meeting them, payment providers must keep tapping into new opportunities and technologies, such as investing in more intuitive websites and apps that offer customers a simple and efficient experience. By
doing so, they can increase their payment volumes and keep customers coming back.
To ensure its customers can easily navigate the process of making a cross-border payment, BNP Paribas developed an app that guides clients step-by-step. “Since we launched this app in France, we’ve multiplied our cross-border payment volumes by six,” says
Damien Godderis, head of payments industry engagement at BNP Paribas, proving that being attentive to customer needs pays dividends.
4. Collaborating
Finally, collaborating with partners presents a powerful opportunity to drive innovation and address pain points within payments. As Godderis observes, “We spend a lot of time on traceability, but for this to be effective, every player within the payment
chain needs to be pushing in the same direction – confirming their part of the process. For this, collaboration is key.”
There are numerous examples of effective collaboration within the financial industry. For example, Citi announced a partnership with Bank of Shanghai, powered by Swift Go, allowing international tourists to access local currency in China via digital wallets.
The way forward
These four innovations showcase the financial industry’s drive to embrace new opportunities and redefine the customer experience. It is critical global financial institutions collaborate to pioneer new solutions that set a higher standard for cross-border
payments. Together, we are shaping the future of fast, seamless, and efficient transactions.