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 €50-100 per payment, and in some cases much higher.

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.