Financial messaging network Swift has announced a new pricing structure for low value payments as it bids to establish a foothold in the turbulent retail payments market.
The new pricing model comes as banks across Europe prepare to meet political pressures to deliver a Single Euro Payments Area (Sepa) for low value funds transfers.
Based on price per payment and community volumes rather than geographic borders, the model will aim to deliver scale benefits to large volume clearers. Payments sent by centralised clearing and settlement mechanisms such as ACHs will be charged to the receiver and fees will apply equally to proprietary as well as XML standards in an effort to ease the move from one to the other.
Bank payments experts have welcomed the initiative as a means to answer the needs of the Swift community in the current climate of change in retail payments
Says Roland Böff of HypoVereinsbank: "The current transformation in retail payments markets is putting huge pressure on pricing. By introducing the new structure, Swift is helping members respond to this pressure whilst ensuring they continue to benefit from the renowned levels of security, resilience and interoperability of the SwiftNet platform."
Through volume aggregation, the LVP pricing model will contribute to price reductions for other Swift messaging services, he says.
"In the Sepa context it means that communities have the incentive to embrace Sepa-compliant instruments," says Böff. "Outside Europe, it should help any bank move to an industrialised model for LVP clearing."