EBA CLEARING, SWIFT and The Clearing House (TCH) announced that they intend to introduce a pilot service for “immediate” cross-border (IXB) payments “with the support of banks from both sides of the Atlantic.”
The pilot service “is scheduled to begin by the end of this year with several participants joining the service in a phased approach.”
It is being designed “with the contribution of 24 financial institutions, including those that are preparing to join the pilot.”
The development of this pilot “marks another important step in the IXB initiative launched by the three private-sector, member-owned companies to improve cross-border payments by utilizing the fastest domestic payment options.”
It follows “a proof of concept completed in October 2021, with the contribution of seven financial institutions.”
The proof of concept demonstrated “the ability to synchronize settlement in one instant payment system with settlement in the other and to convert real-time messages between both systems.”
Since October 2021, the group of supporting financial institutions has “continued to grow and has formed an IXB Sounding Board to provide input on the development of this cross-border payment service leveraging existing real-time infrastructure, technology and standards.”
Based on building blocks, like ISO 20022 message standards, SWIFT Go and the instant payment systems of EBA CLEARING and TCH, the service initially “will support instant payments in the U.S. dollar and euro currency corridor.”
It is “developed with a view to being extended to other currency channels and payment systems.”
Russ Waterhouse, EVP for Product Development and Strategy at The Clearing House, stated:
“The RT1 and RTP® networks are perfectly positioned to deliver a better cross-border experience with a very short time to market. The trans-Atlantic pilot service will provide valuable input for the development of a fully-fledged IXB service to meet customer expectations across the globe.”
Erwin Kulk, Head of Service Development and Management at EBA CLEARING, remarked:
“We are pleased that the IXB development benefits from the expert input of 24 banks from 10 countries. Aside from delivering a simple and transparent service for end users, our key aim is to keep things easy for financial institutions: the fact that there is no need to connect to a separate payment system should make the service very attractive for RT1 and RTP participants of all sizes.”
David Watson, Chief Strategy Officer at SWIFT, noted:
“The interlinking of instant payment systems promises a new way of moving money across borders safely, quickly, and at low cost. SWIFT’s enhanced platform and transaction management capabilities create a flexible and efficient way to interlink multiple instant payment schemes, while enabling banks to re-use their existing investment, and we look forward to supporting the development of the IXB pilot service.”
Raouf Soussi Laghmich, Head of Strategy for Enterprise Payments at BBVA, said:
“In cross-border payments, our customers are demanding faster execution, more transparency in fees and traceability end-to-end. For BBVA, IXB is the right collaborative solution to respond to customers’ needs.”
Carl Slabicki, Co-Head of Global Payments at BNY Mellon, noted:
“We are excited to work with our industry peers to lead the charge in launching cross-border real-time payments across the globe, starting with the U.S. and E.U. This effort is another crucial milestone – leveraging proven and scalable infrastructure – to deliver instant, safe, and secure payments 24/7/365 for our international clients.”
As mentioned in the update, it is “envisaged that the IXB pilot service will be followed by a full service offering in 2023.”
The key features of the service will be “aligned with the focus areas related to speed, access, cost and transparency, as outlined by the Committee on Payments and Market Infrastructures (CPMI) and Financial Stability Board (FSB) for enhancing cross-border payments.”
By providing a model that can be replicated across other currency corridors and payment systems, the IXB initiative is “expected to provide even greater opportunities for financial institutions and their customers around the globe.”