Interbank payments network Swift has moved to head off user concerns over the cost of migrating to a new IP-based network by introducing a package of rebates and tariff reductions for member banks. The Society is also looking to extend its reach by reducing the cost of entry for low volume users.
The 2004 SwiftNet pricing plan includes significant reductions in tariffs for SwiftNet InterAct, FileAct and Browse. This is backed up by an 8% rebate for the 2003 billing period totalling EUR25 million for all FIN users.
Swift CEO Lenny Schrank (pictured) says the new pricing package should unlock a surge of new business. "Even more important is the need to help our members cut costs," he says. "Members migrating to SwiftNet FIN will get an immediate reduction of ten per cent on average. Finally, the EUR25 million rebate will go a long way to mitigating some of the concerns raised about the one-time cost of migrating to SwiftNet."
The ten per cent reduction in SwiftNet FIN prices for 2004 alone will generate a further EUR25 million in savings for Swift members annually, says Schrank, adding: "Sibos this year is where the back office meets the bottomline."
Other reductions include a 46-67% price cut for both InterAct and FileAct for domestic traffic, with pricing for intra-institutional traffic (typically branch-to-branch) the same as domestic prices. Value added features, such as non-repudiation, message priority, store and forward and delivery notification will now be unbundled and priced out seperately.
Users sending shorter messages will also be rewarded, with new breakpoints for InterAct and FileAct ushering in potential price reductions of 50% and 33% respectively. Pricing for SwiftNet Browse will be reduced by upwards of 50%.
Swift is also moving to broaden its user community by introducing new entry level pricing packages for small banks and securities firms. Previously small users connecting to Swift were charged an up-front fee for software and security as well as annual recurring fees. The Society is now proposing to waive those up-front fees and bundle recurring charges into a simple monthly bill. The scheme is expected to reduce total cost of ownership for the first year by as much as 75%.
The initiative comes as Swift prepares for a new peak messaging day - anticipated some time in the next couple of weeks - when daily transaction volumes are expected to surpass the 10 million mark for the first time in the network's 30-year history.