With the support of banks from both sides of the Atlantic, EBA CLEARING, SWIFT and The Clearing House (TCH) have joined forces to make cross-border payments as seamless as the fastest domestic payment options.
The three private-sector, member-owned companies have completed a proof of concept as part of a new initiative, Immediate Cross-Border Payments (IXB), that demonstrates the ability to synchronize settlement in one instant payment system with settlement in the other and convert real-time messages between both systems. The concept could be expanded to additional currencies and is also replicable for more liquidity-efficient high-value payments.
The IXB initiative has had 11 banks contribute to the design, with seven banks – Bank of America, BBVA Group, Citi, HSBC, Intesa Sanpaolo Bank, J.P. Morgan and PNC Bank – participating in the proof of concept, where the banks successfully exchanged payment and confirmation of receipt messages. The initiative responds to the rising expectations of consumers and businesses who have experienced the benefits of domestic real-time payments and now have similar expectations for cross-border transactions.
The IXB proof of concept shows that existing regional instant payment systems can be leveraged for cross-border payments and could provide financial institution participants of all sizes with access to a solution for cross-border payments without the need to build and connect to a separate network.
By taking advantage of existing infrastructure, technology and standards, IXB can help to satisfy, in the near term, customer expectations across the globe for a simple and more transparent way to send cross-border payments. Further, IXB uses ISO 20022 message standards, which allows for innovation and increased competition and its key features are fully aligned with the focus areas related to speed, access, cost and transparency, outlined by the Committee on Payments and Market Infrastructures (CPMI) and Financial Stability Board (FSB) for enhancing cross-border payments.
EBA CLEARING, SWIFT and TCH are planning to engage in next steps towards developing IXB. By providing a model that can be replicated across other currency corridors and payment systems, the IXB initiative is expected to open up even greater opportunities for financial institutions and their customers around the globe.