Magazine article American Banker

Swift Rolls out Program for Global Electronic Commerce

Magazine article American Banker

Swift Rolls out Program for Global Electronic Commerce

Article excerpt

The Society for Worldwide Interbank Financial Telecommunication has devised a program to help banks streamline low-value, cross- border payments.

The program, dubbed SwiftPay, was unveiled at Swift's annual conference last week in Copenhagen. It is to begin operating in January, Swift officials said.

The heart of SwiftPay is a standardized master agreement among participating banks that would replace existing bilateral legal payment pacts. A SwiftPay directory lists the payment instruction requirements and fees of each participating bank. Swift will charge banks a registration fee and update the directory data base. "This is the first step toward end-to-end (electronic) commerce," said Charles Mallis, global marketing executive at Chase Manhattan Bank and a U.S. representative to the Swift committee that designed SwiftPay.

The program covers payments of $20,000 or less, but Swift expects it to cover larger payments in the future.

SwiftPay guarantees end-to-end processing within six working days, and minimum levels for remittance advice information. Swift said it will referee disputes involving SwiftPay transaction, but it wasn't clear how the organization would enforce payment deadlines.

Mallis said SwiftPay should also be useful for new developments like smart cards and electronic purses that aim to replace paper currencies with digital money.

"This is a step in the convergence of wholesale and retail payment systems," added Mallis. "It is a paradigm shift, which I call 'instividualism' - institutional conduits generated through individual payments. …

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