StoneX Announces Adoption of Swift’s Payment Pre-validation Service
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Insights
StoneX's implementation of Swift's Payment Pre-validation service represents a significant advancement in the efficiency of cross-border payments. By enabling real-time validation of beneficiary account details, StoneX is addressing a critical pain point in international transactions that often leads to costly payment failures. The reduction of these errors can have a positive impact on StoneX's operational costs, potentially improving its profit margins.
The service is likely to enhance StoneX's competitive position in the financial services industry, as it offers a more reliable and seamless customer experience. With the cost of repairing failed payments ranging from €50-100, the adoption of this technology could lead to substantial cost savings for StoneX and its clients. Such improvements in transaction reliability and speed can attract more clients, thus potentially increasing revenue streams for StoneX's payment business.
The introduction of Swift's Payment Pre-validation service is a transformative step for the financial industry, especially for organizations like StoneX that handle a high volume of international transactions. The ability to pre-validate payment details could become a new industry standard and early adopters may gain a first-mover advantage. StoneX's extensive network of correspondent banking relationships, crucial for the execution of cross-border payments, is further strengthened by this technological enhancement.
Improvements in data quality and the standardization of error codes are likely to streamline processes and reduce the need for manual intervention, which is a common source of delays and errors. By leveraging advanced APIs, StoneX can automate manual payment processes, which not only reduces human error but also allows for redeployment of resources to other value-adding activities.
The application of Swift's advanced APIs within StoneX's Technology Services division underscores the increasing role of technology in the financial sector. The Payment Pre-validation service's use of pseudonymized and aggregated data from billions of transactions to enhance security and speed is indicative of the growing importance of big data analytics in finance. Such technological advancements are likely to set new benchmarks for the security and efficiency of financial transactions.
As cross-border payments involve multiple jurisdictions with varying regulatory and compliance requirements, the pre-validation service could also reduce regulatory risks by ensuring compliance with international standards. This proactive approach to managing payment risks could mitigate potential legal and financial repercussions associated with non-compliance.
NEW YORK, Dec. 22, 2023 (GLOBE NEWSWIRE) -- StoneX is delighted to announce that it is one of the first financial organizations to enable Swift’s new leading-edge solution for cross-border payments.
Cross-border payments have long been a complex area marked by ongoing regulatory and compliance changes, bank offline hours, and increasing competition. Swift has consistently played a pivotal role in facilitating such transactions, connecting a vast network of financial institutions as well as banks worldwide.
Inaccurate information accounts for one-third of payment failures and incorrect beneficiary details account for another third. The cost to repair a failed payment is estimated to be between
To counter these challenges, Swift recently introduced its Payment Pre-validation service, which allows for the verification of beneficiary account details before initiating international payments. While such verification has long been commonplace for domestic payments in several countries, it was not so for cross-border transactions as they are more complex and often involve one or more intermediary banks. This novel service aims to reduce errors, expedite transaction speed and improve straight-through-processing, resulting in a more seamless customer experience.
StoneX takes pride in being at the forefront of financial organizations adopting this new technology for its clients. The StoneX Technology Services division specializes in connecting organizations to the Swift network, leveraging the latest innovations from Swift, including their advanced APIs and automating manual payment processes.
Mireia Guisado Parra, Product Owner of the Payment Pre-validation service at Swift, said: “Payment Pre-validation utilizes pseudonymized and aggregated data from billions of historic transactions on the Swift network to provide enhanced security and speed in cross-border payments. We are pleased that StoneX are extending these benefits to more financial institutions, thereby reducing friction in the payments ecosystem.”
Clients of StoneX’s payments business, StoneX Payments, will benefit from the adoption of pre-payment validation technology. StoneX Payments facilitates foreign exchange payment transactions in more than 140 currencies and spanning over 180 countries. A distinctive feature of StoneX Payments is its extensive network of over 350 correspondent banking relationships worldwide, each maintained independently. These relationships are leveraged to provide the effective and secure execution of cross-border payments, particularly in regions where transparency is often limited.
Swift's Payment Pre-validation service introduces many significant enhancements to cross-border payments, including:
- Real-time validation of beneficiary account details: This feature enables banks to verify beneficiary account information, such as account numbers and BIC, in real time, preventing transaction failures caused by inaccurate information
- Standardized error codes: Pre-defined error codes expedite the identification of problematic or risk-prone transactions before payment initiation
- Verification of recipient bank's Swift BIC: Ensuring the accuracy of the receiving bank's BIC reduces transaction delays and misdirection
- Improved data quality: Structured and standardized payment data enhances data quality and facilitates transaction processing.
If you’d like to learn more about how StoneX can help you streamline and expedite cross-border transactions, email Ed Phelps, Head of Sales Strategy, StoneX Technology Services (edward.phelps@stonex.com).
About StoneX Group Inc.
StoneX Group Inc., through its subsidiaries, operates a global financial services network that connects companies, organizations, traders and investors to the global market ecosystem through a unique blend of digital platforms, end-to-end clearing and execution services, high touch service and deep expertise.
A Fortune-500 company headquartered in New York City and listed on the Nasdaq Global Select Market (NASDAQ:SNEX), StoneX Group Inc. and its over 3,800 employees serve more than 54,000 commercial, institutional, and global payments clients, and more than 400,000 retail accounts, from more than 40 offices spread across five continents. Further information on the Company is available at www.stonex.com.
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