US-based financial services company StoneX, through its payments business StoneX Payments, has adopted SWIFT’s payment pre-validation service for cross-border payments.
StoneX is the first financial organisation to adopt the payment pre-validation service.
Its StoneX Payments division facilitates foreign exchange payment transactions in more than 140 currencies, across 180 countries, with more than 350 banking relationships worldwide.
According to the financial services company, cross-border payments are associated with ongoing regulatory and compliance changes, bank offline hours, and rising competition.
SWIFT has been playing an important role in enabling cross-border transactions, connecting a large network of financial institutions along with banks across the world.
Also, inaccurate information accounts for one-third of payment failures, while incorrect beneficiary details account for another third, StoneX.
To address payment failures, SWIFT recently introduced its Payment Pre-validation service, which enables verification of beneficiary account details before initiating international payments.
The verification has been used in domestic payments in several countries, but not for cross-border transactions due to their complexity and involvement of one or more intermediary banks.
The payment pre-validation service aims to reduce errors, advance transaction speed and improve straight-through-processing, said the financial services company.
StoneX technology services division will connect organisations to the Swift network, using SWIFT’s advanced APIs and automating manual payment processes.
SWIFT payment pre-validation service product owner Mireia Guisado Parra 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 is extending these benefits to more financial institutions, thereby reducing friction in the payments ecosystem.”
SWIFT’s new service is said to add several enhancements to cross-border payments, such as real-time validation of beneficiary account details, standardised error codes, and verification of recipient bank’s Swift BIC, among others.
The service enables banks to verify beneficiary account information, such as account numbers and BIC, in real-time, avoiding transaction failures due to inaccurate information.
Its pre-defined error codes are intended to help identify risky transactions before payment initiation and BIC verification reduces transaction delays and misdirection, said StoneX.
