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Payment update: real-time payroll; SWIFT gpi in China

Payment revolution continues with real-time payroll payments and SWIFT gpi starting to dominate.

Real-time payroll

Mastercard launched Mastercard Send in the UK. Mastercard Send is a payment service that allows financial institutions, FinTechs, digital customers and other businesses to send real-time payments to UK bank accounts and also to receive payments by the same means.

The first UK customer for the service will be Income Group, a payroll-focused payment provider that enables businesses to significantly improve the efficiency and reduce the costs associated with running a payroll by reducing the time taken to pay employees down from days to real-time, as figure below shows:

Source & Copyright©2018 - IncomeGroup

Income Group Payments can be made using the same process as a BACS run - but in seconds rather than days, and without the costs, pressures and limitations of traditional CHAPS or BACS payments. The main benefits IG claim are:

  • Benefits for payroll and finance managers:
    • 50% or more cost savings of traditional & recalled payment options
    • Enhance payment processing whilst maintaining authorisation workflows
  • Benefits for payroll bureau
    • Have more time & control for payroll changes and processing
    • No more payment system upgrade charges. 

Chinese banks work with SWIFT gpi

Ten Chinese banks have gone live on SWIFT global payments innovation initiative (gpi) since its launch in 2017. The banks are: Bank of China, Industrial and Commercial Bank of China, Bank of Communications, China Minsheng Bank, China Guangfa Bank, China Construction Bank, Bank of Jiangsu, Shanghai Pudong Development Bank, China Citic Bank, and China Zheshang Bank. 

Seventeen other Chinese banks have committed to SWIFT gpi in China and are in the process of going live. Together, these banks represent an estimated 86% of cross-border payment traffic conducted by Chinese banks in mainland China. In addition, a number of foreign banks with mainland presence are already on the SWIFT gpi network.

SWIFT gpi development in Asia

In March 2018, SWIFT announced the extension of its gpi Tracker to cover all payment instructions sent across the network, enabling gpi banks to track their SWIFT payment instructions at all times, and giving them full visibility over their payments activity. 

As a next phase, SWIFT has created a work group comprised of banks from China, Australia, Singapore and Thailand to explore if these payments can be further sped up. The work group will define a set of business rules to look into how business process frictions can be overcome to facilitate faster (or close to real-time) payments. The working group will also identify domestic real-time payment systems that will carry the gpi information and unique end-to-end transaction references (UETRs), to allow the reach of the gpi service to extend into domestic payment system environments.

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