Payments

SWIFT GPI And You

May 5, 2020 4 min read

The world of payments is becoming ever more international, and SWIFT is one of the projects set to make it more connected than ever.

Unlimint team
Your payment experts

Keeping payments moving quickly and internationally is the lifeblood of any company, without question. The faster they function, the more business you and your customers can do. It’s when they’re otherwise inaccessible or out of pace with your whole business model that things get frustrating.

For context, SWIFT is one of more popularly used international payment methods for businesses that go global. While it proves effective, having been in use for some time now, it’s had to deal with some considerable bottlenecks over the last few years.



Scale & Transaction Times

As a digital money wiring/messaging solution, SWIFT is used by businesses all over the world and remains one of the largest money transfer solutions.

This scale, in addition to the new, growing and pressing demand for international payments as a standard, is forcing SWIFT to pick up the pace.

On average, an international money transfer from company A to B takes anywhere from 24 hours to 3 days. Even this depends on time differences between countries where companies are situated and how busy the system is at those given times.

With the growing use of digital payments worldwide, now more than ever, payments supply has to be able to keep up with the rapidly growing demand. That’s why SWIFT has introduced its new GPI set.


Cross border payments are one of the most frequently used, and most lucrative ways in which eCommerce businesses serve customers.

What SWIFT GPI Is

To summarize, SWIFT GPI is the means with which to provide users with a traceable, scalable and fast international payments solution, worldwide.

Overall, the implementation of GPI aims to cut transaction times down from days to minutes or hours, while allowing it to support the previously closed economies of cross-border payments.

What SWIFT GPI Does

In a statement provided by SWIFT on its website back in July 2019, the company pressed forward with its plan to create a ubiquitous, completely currency agnostic means for companies to make and take payments from all over the world.

What it means for eCommerce Payments

One of the biggest areas for eCommerce businesses and how they take payments is in the world of cross-border commerce. It’s one of, if not the most significant revenue producers for companies in the United States, Latin America, Europe and Asia.

But much of this comes down to having existing partnerships or securing them with payment providers in the region. In many instances, this can result in companies wanting to expand into different regions but lacking the ability to do so effectively.

SWIFT GPI aims to open up cross-border and add it into the broader sphere of international payments, which means that companies could use a single APM provider, like us, to do business anywhere at any time.

As a system, it’s divided up into three components:

Tracker

Each of these components remains rather self-explanatory, but the tracker serves as a means of tracing payments between users. This tracking includes a fast-acting payment validation system which should cut waiting times down significantly.

According to SWIFT, Tracker, as part of GPI will allow for payment validations to be settled in anywhere from 30 minutes to 24 hours.

This transaction speed is more than just a theory; with SWIFT GPI already being used by a significant proportion of businesses. 55% of companies using SWIFT have helped move $40 trillion using SWIFT GPI in 2018 alone.


Bringing closed circle cross border into the world of international payments would allow companies to easily pick up new payment methods from companies like CardPay

Observer

GPI Observer serves as a quite literal observer for any an all transactions conducted through SWIFT’s tracker system.

Having a solution like this also enables the quick on-boarding of companies into this solution, with the Observer retaining a ledger of companies that are in regulatory compliance with it.

SWIFT GPI and its Observer aim to bridge the gap between developed and emerging markets as well.

Directory

Much as the name suggests, the GPI Directory system is a directory of all existing member institutions and the capabilities they have within the system.

For companies in emerging and developed markets, this takes the substantial concern of trust out of the equation; allowing businesses to send and receive money from any of their fellow member institutions without risks.



The Future of International Payments

While SWIFT is attempting something rather exciting with its new GPI’s, it’s certainly not the only company seeking to solve this issue.

Competitors in this space include the likes of Visa Direct and MasterCard Send. Each aims to simplify payments across the broad expanse of kinds such as cross-border, business-to-consumer and even government to citizen.

KEEP READING

Join Unlimint newsletter and get the highlights of upcoming events, fresh articles & special offers
We’ve got all your details, thanks!