Wim Raymaekers, SWIFT: "Having a good payment infrastructure benefits your supply chain"

Designed for the corporate treasurer, SWIFT’s global payments innovation initiative offers an ambitious roadmap for reinventing the correspondent banking model as we know it today. With ever increasing competition from new entrants offering same-day, or even real-time payment facilities, SWIFT is uniting the banking industry to provide corporates with a cross-border payment service that offers greater speed, transparency and predictability.

Launched in December 2015 to much anticipation in the industry, the initiative has received strong backing with more than 50 leading banks already signed up. The Paypers spoke to Wim Raymaekers, SWIFT’s Head of Banking Market and programme manager of the global payments innovation initiative, to find out more about this exciting move.

We often hear that B2B payments are opaque, complex, and risky. Why do you think that is, and where do you think that improvements can be made?

Yes, currently when a corporate treasurer sends a request for a cross-border transaction to his bank, he typically has no sight on what actually happens with that demand. They often liken this to a ‘black hole’, saying they have no view on when payments occur or their final costs. This can lead to problems with suppliers or end-customers, not to mention increasing financial risks resulting from payment delays or non-compliance with regulatory requirements.

I think improvements can be made in three main areas: firstly, the speed of payments; corporates want fastest payments, so banks need to be able to guarantee that they are made within certain timeframe. Secondly, corporates want to know the exact payment amount that will reach their counterparty – here banks need to provide transparency on the fees involved and the amount credited to the creditor. And, thirdly, they want to be able to track payments; banks need to let corporates know when payments have been initiated and credited to the creditors account to avoid delays in the supply chain or frictions between supplier and seller.

What are the opportunities for a corporate to leap forward through the use of the cross-border payment industry?

Corporates are not in the business of payments, they just want to buy and sell. Yet they do have to manage their treasury to make those payments – so a better, faster, more transparent payment solution is important to them. On top of that, having a good payment infrastructure benefits your supply chain. Because if the money does not get to the supplier in time, the credit line will go up, causing delays on all fronts. So the better your payment infrastructure is, the stronger and more reliable your supply chain is. What can you tell us about the global payments innovation initiative (gpii), and what are SWIFT’s plans in regard to this initiative?

As part of the initiative, SWIFT is working in close collaboration with the largest transactions banks in the world to enhance their corporate customers’ cross-border payment experience. Together we will strive to provide a faster service with upfront clarity on costs, confirmation of delivery and richer remittance information data.

We are now working together with the banks to commonly agree service level agreements (SLAs) to which all the initiative member banks must comply. The new service will be designed to address end-customer needs, without compromising banks abilities to meet their compliance obligations, market, credit and liquidity risk requirements.

What is the role of blockchain in this initiative?

SWIFT is devoting significant resources to instigate the opportunities and challenges of deploying blockchain, and distributed ledger technologies more broadly, on our platform. While the initiative aims to first make improvements based on the existing infrastructures, in parallel, we are building a gpii vision for cross-border payments. This will set out how we will adopt new technologies in order to ensure corporate customers receive the best possible payments experience in the near future.

If you like the story and would enjoy reading more about it, please download the B2B Fintech: Payments, Supply Chain Finance & E-invoicing Guide 2016.

About Wim Raymaekers

Wim Raymaekers leads SWIFT’s banking initiatives worldwide, and is responsible for developing and driving value propositions across the banking community. In this capacity, Wim’s mission is to help banks grow their business, particularly in view of changing customer and market requirements.

About SWIFT

SWIFT is a global member-owned cooperative and the world’s leading provider of secure financial messaging services. We provide our community with a platform for messaging and standards for communicating, and we offer products and services to facilitate access and integration, identification, analysis and financial crime compliance.