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Payments Innovation: Debunking the Myths Bruno Mellado, BNP Paribas, shares his views on the most exciting developments in the payments space today - and explains how new technologies can work alongside existing infrastructures to drive innovation.

Payments Innovation: Debunking the Myths

Payments Innovation: Debunking the Myths 

Bruno Mellado, Head of International Payments and Collections, BNP Paribas Cash Management


In this Executive Interview, Bruno Mellado, Head of International Payments and Collections, BNP Paribas Cash Management, shares his views on some of the most exciting developments in the payments space today, whilst explaining how new technologies can work in harmony with existing infrastructures to drive innovation.


Bruno Mellado
Bruno Mellado

The cross-border payments landscape has evolved significantly over the last 12-18 months. In your view, what are the most important developments for treasurers to be aware of?

In the digital age, it is no longer acceptable that international payments take several days to process – and yet supply chains work on a just-in-time basis, with parts being shipped all over the world in a matter of hours. What’s more, almost one in every 200 cross-border payments gets held up, often as a result of incomplete data, drawing out the international payments process even further.

Thankfully, a number of different initiatives are now under way with the aim of improving international payments through the use of technologies such as cloud computing and blockchain and new networks. Many of these initiatives are being run by alternative payment service providers and BNP Paribas has participated in several initiatives with new and existing players in this sphere, since we believe the future of cross-border payments depends on greater collaboration. After a very successful pilot, we are launching our new blockchain-based payment solution for corporates in the coming months. 

Despite the promise of these alternative networks, SWIFT’s global payments innovation (SWIFT gpi) initiative is emerging as a frontrunner in the race for better cross-border payments. Connecting the largest ecosystem of payment providers, including BNP Paribas, SWIFT gpi offers a standardised environment that is well suited to corporates who want to process high value international payments in a secure yet speedy and transparent manner.

As SWIFT gpi demonstrates, innovation doesn’t have to be about building  brand new payments rails. It can be about finding new ways to use existing infrastructures and complementing those with the latest technology to create a much more powerful solution for treasury needs.

What are the benefits of SWIFT gpi for treasurers and can corporates reap all of those advantages right now?

SWIFT gpi offers corporate treasurers same-day value, pricing transparency, and end-to-end tracking across their cross-border payments. Nearly 50% of SWIFT gpi payments are credited to end beneficiaries within 30 minutes, and almost 100% of payments within 24 hours. 

Nevertheless, for these benefits to be sustained and to grow, the industry must build out a complete gpi highway, with as many participants on board as possible. We are not there yet, but a great deal of progress is being made – including the agreement of US payment market infrastructures to support SWIFT gpi tracking of cross-border payments. As of February 2018, 150 financial institutions have signed up for gpi, together with more than 50 payment market infrastructures. Today BNP Paribas is amongst the first 40 institutions live. 

As I mentioned, however, there is still some way to go before the potential of SWIFT gpi can be fully realised. Not only are there more development phases to accomplish, there needs to be a greater push from the corporate community for more banks to support gpi functionality. Only through an industry-wide, community-based effort, can SWIFT gpi truly solve current international payments challenges.

You mentioned end-to-end tracking of payments as a corporate benefit, but will all corporates be able to access SWIFT gpi tracking information directly? What are BNP Paribas’ plans in this space? 

All gpi banks have direct access to the cloud-based gpi tracker, from where they can see the status of a payment since each gpi payment is assigned a unique end-to-end transaction reference (UETR). Corporates are unlikely to want to check the status of every payment they send; they are most likely to want to see the information within the tracker when there is a delay or a problem with a payment.

With this in mind, not all banks have integrated the gpi tracker into their corporate banking platforms. To this end, BNP Paribas has enabled its global e-banking channel to receive the latest gpi status and a copy of the message from each correspondent bank in the chain. This allows the  beneficiary  a more accurate proof  of the payment initiation.

Another payments development in recent years is the use of on-behalf-of (OBO) structures. Is this still a popular trend among corporate treasurers? If so, what are the drivers here – and are they changing? 

Centralising payments and rationalising bank account structures through payments on-behalf-of (POBO) is definitely becoming a more widespread practice among the treasury community, especially in Europe. Collections on-behalf-of (COBO) are also becoming increasingly popular.

Banking technology solutions, especially virtual accounts, significantly enable the adoption of both POBO and COBO structures and liquidity optimisation into few currency accounts while not losing traceability and granularity of the OBO payments and collections. However there is significant debate as to how far the model can be implemented without creating a breach of AML or legal requirements which may vary in some countries. For example, initiating payments where virtual accounts are used to replace the original physical accounts may be a step too far for many regulators. For receipts, meanwhile, virtual accounts enable organisations to know precisely who has paid them and in relation to which invoices. As a result, manual exceptions are decreased and key personnel are freed up to tackle more value-added tasks.


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