TCH, SWIFT, And EBA Clearing Close in on a Pilot for Real-Time Cross-Border Payments

The Clearing House, EBA Clearing, a provider of pan-European payment-infrastructure technology, and financial-messaging specialist SWIFT have taken the next step in making their planned real-time cross-border payments pilot a reality.

The three companies announced late Thursday that the technology piece of the puzzle is ready. This includes technical messaging between the pilot institutions and the respective payment systems.

The remaining steps before the pilot’s launch later this year involve sorting out legal, transactional monitoring, and jurisdictional issues for participating banks, a spokesperson for The Clearing House tells Digital Transactions News.

The latest announcement builds on the three companies’ release in October last year that they had completed a proof of concept for real-time cross-border payments.

The international cross-border pilot (IXB) will leverage existing real-time payment systems. These include RTP in the United States, which is run by The Clearing House, and RT1 in Europe, which is operated by EBA Clearing. When the pilot launches, transactions will be processed in U.S. dollars and the euro. The pilot is expected to run well into the 2023 calendar year.

“By the fourth quarter of 2023, we expect to have all lessons learned, at which point we can move to a full rollout,” TCH’s spokesperson says.

While 25 financial institutions on both sides of the Atlantic have been involved in the development phase of the pilot, only a handful of institutions in the U.S and Europe are expected to go live when the pilot officially launches, the spokesperson says. In the meantime, end-to-end testing between RTP, the IXB app, and RT1 will continue, with user integration and tests following shortly thereafter.

Bringing real-time payments capabilities to cross-border payments is expected to smooth over many of the bumps that create friction, such as lack of immediate confirmation a payment has been received. Lack of real-time confirmation can be a nettlesome problem for businesses sending payments to suppliers out of the country, as they may not know for 24 hours or longer whether a transaction has been completed or denied, The Clearing House spokesperson says.

“Traditional cross-border payments can be difficult and are not as smooth as a domestic transaction,” says the spokesperson. “With RTP and RT1, those initiating cross-border payments will get real-time confirmation a transaction went through.”