Furthermore, 26% said they believe the current correspondent banking model is unsuitable for making payments of less than $50,000. This agreement amongst banking professionals, that the correspondent banking model is unsuitable for making low value payments, clearly shows that the model, which was originally designed to make payments for high value international trade, is failing to meet the needs of an ever more globalized economy.

Hank Uberoi, CEO of Earthport, said, “While these results are unsurprising to us, it is great to see that the majority of people in our profession agree with our position. We believe that a system for making payments, created in an era when low value cross-border payments were the exception, not the norm, cannot deliver the transparency, predictability or efficiency demanded by either banks or their end-customers in today’s world. What these results, and our conversations with banks and payment organizations tell us, is that we are reaching a tipping point in the payments industry - more and more of those involved in the industry are realizing the need for a fundamental rethink of the way this market works. Disruptive technologies have changed the way we do so many things in our personal and business lives, from making calls, to reading books and booking taxis. Banking, and in particular, the low value, cross-border payments industry, is ripe for change - and we believe we have the best solution for the market as it is today, and as it will be in the future.”

When asked to rank in order of priority, the commercial drivers that would lead them to consider low value international clearing, 86% of survey respondents ranked the ability to provide their customers with transparency regarding the fees they would be charged on each payment in their top three concerns, with ‘improving efficiency in operations’ and ‘predictability of settlement date provided to customer’ also coming in the top three at 60% and 58% respectively.

Said Hank, “Earthport serves many banks and payment organizations, including two of the top five global banks, to provide them with an alternative to maintaining multiple correspondent banking arrangements for the purpose of making low value international payments. Our customers, which also include some of the innovative new payments providers, have recognized that their customers are looking for efficient and effective payments services which give them certainty in terms of knowing when their payments will arrive, and good value for money in terms of the fees they are charged to make their payments. And the good news for us, and of course for the end user of payments services, is that it’s not just our customers who see the value of modernizing the way payments works. 60% of those who responded to our survey told us they either have, or are putting, plans in place to deliver international payments products with low value international clearing.”

Earthport surveyed 55 banking professionals during SIBOS 2014.