EBA Clearing, SWIFT, TCH To Pilot Cross-Border Instant Pay By End Of Year

May 4, 2022
EBA Clearing, SWIFT and The Clearing House (TCH) have announced that they plan to launch a pilot service for immediate cross-border payments beginning by the end of this year.

EBA Clearing, SWIFT and The Clearing House (TCH) have announced that they plan to launch a pilot service for immediate cross-border payments beginning by the end of this year.

The new initiative called Immediate Cross-Border Payments (IXB) is being designed with the contribution of 24 financial institutions, including several large banks that will join the service in a phased approach.

The IXB payments are “use-case agnostic”, EBA Clearing told VIXIO, meaning that it is up to the financial institutions and their customers to decide which channels they use for their different payments.

“It could be used for virtually any payment end-user solution that involves inter-bank settlement at a cross-border level,” EBA Clearing said.

The IXB will initially support instant payments in the US dollar and euro currency corridor and will be based on the RT1 and RTP instant payment systems owned and operated by EBA Clearing and TCH, respectively. RT1, specifically, is a pan-European service that is reachable by 2,500 payment service providers, or around 45 percent of banks in the region.

EBA Clearing stressed that IXB is developed with a view to being extended to other currency channels and payment networks, “where appropriate, in the future”. Previously, Russ Waterhouse, vice president at TCH, singled out Canada, Australia and the UK as very important markets.

Following the pilot, the three private-sector, member-owned companies are planning to launch a full-service offering in 2023.

EBA Clearing, SWIFT and TCH previously carried out a successful proof of concept in October 2021. This showed that participants could synchronise settlement in one instant payment system with settlement in the other and convert real-time messages between both systems.

At that point, Waterhouse said innovation in cross-border payments is ultimately a commercial issue as banks are starting to recognise that they need to be more innovative.

Since then, the initiative has grown from seven big bank participants to 24 and formed an IXB Sounding Board with the aim of providing input on the development of this cross-border payment service leveraging existing real-time infrastructure, technology and standards.

The service is built on “state-of-the-art building blocks”, such as ISO 20022 message standards or the SWIFT Go mobile app.

The key features of the service will be aligned with the focus areas related to speed, access, cost and transparency, as outlined by the Committee on Payments and Market Infrastructures (CPMI) and Financial Stability Board (FSB) for enhancing cross-border payments, TCH said.

“Aside from delivering a simple and transparent service for end users, our key aim is to keep things easy for financial institutions: the fact that there is no need to connect to a separate payment system should make the service very attractive for RT1 and RTP participants of all sizes,” said Erwin Kulk, head of service development and management at EBA Clearing.

“This effort is another crucial milestone — leveraging proven and scalable infrastructure — to deliver instant, safe, and secure payments 24/7/365 for our international clients,” said Carl Slabicki, co-head of global payments at BNY Mellon.

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