How to avoid using SWIFT altogether and/or in combination with other channels
by Jack Large
CTMfile’s 24th May’s post on ‘Bank connectivity - which is most cost-effective: Host-2-Host or SWIFT?’ generated considerable interest and several comments.
Philip Wielanga, Director, Wieltec treasury services wrote that he believes that “SWIFT is expensive but allows you to reach all banks around the world. (Set up costs and cost per payment/statements)”. His assessment of the alternatives is:
EBICS is a free channel (fast growing). It already is the standard in Germany, France and very popular in Swiss. (100% free of charge). Also in NL more banks are offering EBICS to their corporate customers, e.g. ING already, ABN in the summer
MCFT: (MultiCash File Transfer). similar to EBICS, offered by banks who use a MultiCash bank server (over 100 banks around the world)
H2H is also expensive (costs differ per bank)
He then asked., “What if eight out of ten of your banks offer EBICS or MCFT?” The effective solution is, he believes, “Connect these eight via EBICS/MCFT and the remaining two via a H2H.”
Covering all channels
There are connectivity service suppliers who cover all channels. One is Omikron, the supplier of the Multicash Transfer service, who cover all these channels as well as providing a SWIFT connection, as the figure below shows:
Source & Copyright©2016 - Omikron
CTMfile take: There are alternatives to a single SWIFT connection. The key has to be able to use the effective combination of channels that are appropriate for your electronic banking volumes and the banks used.
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I found the original article and this follow-up to be less than helpful. They’ve both missed the fundamental point which is that corporates can use SWIFT without connecting directly to it, through their bank. That is the most efficient and secure way. Corporates can only connect directly if they are invited to do so and are sponsored by their bank. The volumes from the corporate need to be high enough to support the direct costs. Using a SWIFT bureau like Bottomline can significantly reduce direct costs.