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What Is SWIFT GPI?

May 25, 2020June 19th, 2024No Comments
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SWIFT, an acronym for the Society for Worldwide Interbank Financial Telecommunication, is an international, member-owned cooperative established in the 1970s to pioneer a global financial messaging service. Out of this initiative emerged FIN (Financial Information Network), a communication system facilitating standardised message exchanges following specific MT formats set by SWIFT. Collaborating with 11,000 member institutions, SWIFT facilitates an impressive $150 trillion in transactions annually. In 2022, the traffic of SWIFTNet FIN messages exceeded 11 billion payments and securities transactions for the year, with the peak day recording 50 million messages exchanged.

In 2017, SWIFT launched Swift GPI, standing for the Global Payments Initiative, aimed at addressing the challenges of sluggish cross-border payments and the absence of payment tracing abilities. According to Swift, approximately 50% of GPI payments are credited to end beneficiaries within 30 minutes, 40% within less than 5 minutes, and nearly 100% of GPI payments within 24 hours. The adoption of SWIFT GPI has been significant, with nearly 60% of all international transfers sent via SWIFT now executed using SWIFT GPI.

How is SWIFT gpi Different?

Traditional payments conducted through the SWIFT network often lack transparency and can be subject to delays. SWIFT Global Payment Innovation (GPI) revolutionises this process by offering enhanced transparency, speed, and traceability.

One significant feature of SWIFT GPI is its real-time tracking capability, allowing users to monitor the status of their transactions from initiation to completion. This tracking feature provides detailed information about each stage of the payment process, including confirmation of when funds are credited to the beneficiary’s account.

Moreover, SWIFT GPI offers improved transparency regarding fees and charges associated with the transaction. Users can view comprehensive breakdowns of charges, including information about correspondent banks involved in the payment chain and the exact amounts deducted at each stage. This transparency helps users make more informed decisions and ensures they understand the total cost of their transactions upfront.

Another key advantage of SWIFT GPI is its ability to facilitate faster cross-border payments. By leveraging direct bank-to-bank communication and pre-validation of payment instructions, SWIFT GPI significantly reduces processing times. As a result, a considerable percentage of GPI payments are credited to the beneficiary’s account within minutes, offering unprecedented speed compared to traditional SWIFT transactions.

Furthermore, SWIFT GPI incorporates advanced security measures to mitigate the risk of fraud and errors during the payment process. Features such as the Unique End-to-end Transaction Reference (UETR), introduced in 2017, provide an additional layer of security by assigning a unique identifier to each transaction, ensuring its integrity and traceability throughout the payment lifecycle.

How Can I use SWIFT gpi?

To send money via SWIFT, the Rutland FX platform primarily processes our payments through SWIFT GPI. Therefore, if it’s available for a payment you are making, it will be used by default, eliminating the need to toggle it. This means you can track your payments directly on the platform by accessing the SWIFT tracking tab. There, you will be able to view the full journey of your payment and its duration. Additionally, you can see if any intermediary fees were deducted.

What are FIN or MT messages?

FIN messages, also known as MT messages, are standardised formats for financial messages used by financial institutions within the SWIFT network. These messages enable the exchange of various types of financial information securely and efficiently. The are 10 categories of SWIFT messages that consist of  over 200 message types Here’s a breakdown of some common FIN/MT message types:

MT1xx: Customer Payments and Cheques

  • MT101: Request for Transfer
  • MT103: Single Customer Credit Transfer
  • MT110: Advice of Cheque(s)

MT2xx: Financial Institution Transfers

  • MT200: Financial Institution Transfer
  • MT202: General Financial Institution Transfer
  • MT205: Financial Institution Transfer Execution

MT3xx: Treasury Markets – Foreign Exchange, Money Markets, and Derivatives

  • MT300: Foreign Exchange Confirmation
  • MT320: Fixed Loan/Deposit Confirmation

MT4xx: Collections and Cash Letters

  • MT400: Advice on Accepted Drafts
  • MT410: Acknowledgement
  • MT420: Payment Order/Remittance Advice

MT5xx: Securities Markets

  • MT540: Receive Free
  • MT541: Receive Against Payment
  • MT542: Deliver Free

These are just a few examples of the numerous message types defined by SWIFT to accommodate different financial transactions and instruments. Each message type serves a specific purpose and contains structured data fields to ensure accurate and secure communication between financial institutions.

What is a SWIFT code?

A SWIFT code, also known as a Bank Identifier Code (BIC), is a unique identification code assigned to financial institutions worldwide. It serves as a standardised format for identifying banks and financial institutions during international transactions, ensuring smooth and secure communication across borders. Consisting of either eight or eleven alphanumeric characters, the SWIFT code provides essential information about the bank’s name, country, city, and branch. When sending or receiving funds internationally, the SWIFT code plays a critical role in routing the transaction to the correct destination, facilitating efficient and error-free processing. Additionally, SWIFT codes are indispensable for verifying the authenticity of banking entities and ensuring compliance with international banking standards and regulations. Overall, SWIFT codes are fundamental components of the global banking system, enabling seamless communication and interoperability among financial institutions worldwide.

Example SWIFT Code: ABCDUS33XXX

  1. The first four characters (“ABCD”) represent the bank’s unique identifier or bank code. This portion of the SWIFT code is specific to the bank itself.
  2. The next two characters (“US”) indicate the country where the bank is located. In this case, “US” stands for the United States.
  3. The following two characters (“33”) represent the location code, specifying the city or region where the bank’s headquarters or main office is located.
  4. The last three characters (“XXX”) denote the branch code, which is optional. If included, it identifies a specific branch of the bank. In this example, “XXX” is used to denote the primary office or headquarters of the bank.

Overall, the SWIFT code “ABCDUS33XXX” uniquely identifies a particular bank, its country, location, and, if applicable, a specific branch within the institution. This standardised format ensures accurate routing and processing of international financial transactions.

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SWIFT Payment Tracking FAQs

Is The Tracking Updated In Real Time?

Yes, the data is shown in real-time, meaning that you have immediate visibility and transparency over any payment you have sent via the SWIFT network.

What Is a Typical Timeframe For a Payment?

The vast majority of payments are credited on the same day, with beneficiaries in certain countries receiving payments in seconds, minutes, or hours. As of October 2020, 42% of all SWIFT payments we send credit the beneficiary bank account in under 5 minutes.

Why Does My Payment Still Say “Processing”?

“Processing” within SWIFT Payment Tracking means that we have not received final confirmation from the beneficiary bank that the payment has been received. This could be because:

  • The payment has not yet been received.
  • The beneficiary bank has not (yet) reported back to the SWIFT network that the payment has been received.

Please note that elsewhere within your Rutland FX account, you may see a SWIFT payment marked as ‘Completed’, this means that the money has been dispatched. It does not mean that the money has been credited to the beneficiary. You can use SWIFT Payment Tracking to find out this information.

Are All Payment Events Reported?

If the payment is a SWIFT gpi-enabled payment, it will be assigned a UETR number that allows it to be tracked at any point across the network. SWIFT gpi is growing, but currently, not all banks around the world are SWIFT gpi-enabled. Therefore, payment tracking data may be incomplete for some payments we send out.

What Is Universal Confirmation?

Universal Confirmations were mandated for all SWIFT members in November 2020. This means that SWIFT members must confirm when a payment (MT 103) has been credited to the account of the beneficiary, placed on hold, or transferred outside of SWIFT. The introduction of Universal Confirmations has improved coverage on tracking visibility.

As a beneficiary financial institution of SWIFT payments, Currency Cloud is obligated to confirm to the SWIFT tracker when we have credited funds to a customer’s account (or returned them).

What Is The Benefit of Universal Confirmation?

On inbound transactions (collections and receipts), any sending banks using SWIFT gpi can see when any funds they send to us have landed successfully and been credited. On outbound payments, this ensures we get even better coverage on tracking visibility.

 

Still not Sure?

If you are still unsure or have any further questions, please call us on 0203 026 0112 or request a callback below to discuss your requirements.