Swift’s connectivity solution for instant payments, SwiftNet Instant, is now live on the Eurosystem’s Target instant payment settlement (Tips).
SwiftNet Instant enables access through a single user interface to multiple instant payments systems in Europe for both domestic and cross-border payments. This includes Tips, which was launched on Friday by the European Central Bank (ECB), as well as RT-1, the instant payment service offered by EBA Clearing.
The first transaction took place immediately, when a client of Spanish bank, CaixaBank, used Tips to make an instant payment to a client of French bank, Natixis. The two banks are joined on Tips by Abanca Corporación Bancaria, BBVA, Banco de Crédito Social Cooperativo, Berlin Hyp, Caja Laboral Popular Cooperativa de Crédito and Teambank.
The solution has been designed as a building block for access to the future Eurosystem Single Market Infrastructure Gateway (ESMIG). Swift says that adapting systems and processes to ESMIG will be one of the most crucial tasks facing European financial institutions in the coming years, and that SwiftNet Instant offers a future-proof solution to facilitate banks’ migration to this single European gateway.
The provision of an instant payments messaging service for Tips is the latest step in Swift’s worldwide instant payments strategy. In October, the company declared an Asia Pacific instant cross-border payment trial of its global payments innovation (gpi) service a success, following an experiment covering three country corridors: China to Australia, Singapore to Australia and Thailand to Australia. The global transaction network now plans to roll out gpi to all of its banking users by 2020.
Earlier this year, Wim Raymaekers, global head of banking market at Swift, told GTR that the additional cost of moving to gpi “are very low, especially compared to switching to other systems”, as Swift customers can transition to “instant” payments simply by leveraging existing investment in their Swift infrastructure. However, at an event in Hong Kong in June, blockchain-based payments network Ripple dismissed Swift’s improvements, claiming that the gpi service, which does not use blockchain, is “just a marginal improvement” on “very old architecture”, implying that, in order to achieve truly instant payments, the use of blockchain technology is essential.