Swift Eases X-Border Friction By Letting FIs Check Recipient Info

In a move that takes away a point of friction in cross-border transactions, Swift rolled out a service that will let banks check a beneficiary’s account information prepayment, according to a Thursday (July 8) announcement. The Belgium-based organization says that the payment pre-validation service is a keystone of its plan to fuel “instant and frictionless transactions” globally.

“Pre-validation is an important step in helping corporates to make simpler, faster and more secure cross-border payments. This feature will ensure customers can send payments in confidence, and the increased security brings benefits not just for customers but for the entire payments community,” Tom Halpin, global head of Payments Product Management, HSBC, said in the announcement.

While many cross-border payments are handled without a problem, inaccurate recipient data is among the top reasons for cross-border payments that lose time or aren’t successful. Those mistakes can include transposed account numbers or names that are not spelled correctly. They can take the most time and financial resources to rectify since they are found late in the workflow.

To take on this issue, Swift’s Payment Pre-validation service lets a sending financial institution (FI) verify account information by the way of an application programming interface (API) with the receiving institution from the workflow’s start. As a result, information or account issues are found at the beginning of the process.

“Payment Pre-validation will bring end-to-end efficiency, enabling our customers to provide better, faster and new services to their own end clients,” SWIFT Chief Product Officer Stephen Gilderdale said in the announcement.

PYMNTS previously reportedly that companies globally are doubling down on cross-border innovation amid an increasing need for quicker and more efficient business-to-business (B2B) payments — and their payments decision-makers are given the challenging work of finding the innovations in which they should invest. A one-size-fits-all approach to innovation doesn’t exist, after all, but companies can harness many technologies to make their cross-border payment processes simpler to manage.