Why Cross-Border Track and
Trace Payments Matter Beyond
the Transaction

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Today’s consumer can order a pizza for delivery to any hotspot and receive up-to-the moment status on its whereabouts. No longer is this level of tracking, and the visibility it provides, limited to the realm of overnight package delivery. Customers expect immediacy not only in product delivery but also in information. Payments are integral to this seamless end-to-end experience. Corporations are driving and influenced by this emerging world of commerce, and increasingly they have the same expectation for speed, transparency and traceability for payments.

However, until recently cross-border payments had not made the leap to satisfy these expectations. The limited ability to track and trace transactions has been a key constraint. The banking industry approach has been to initiate a payment and only begin an effort to trace it if and when clients inquired, typically when the beneficiary claimed non-receipt.

Now payments data is finally transparent. The industry has developed SWIFT gpi, as the new standard in global payments. A key element of SWIFT gpi is its track-and-trace capability that lets you see where a payment is at any given moment. SWIFT gpi is a first step in solving this longstanding cross-border payments challenge because it covers the interbank portion of the transaction flow. Banks must build this into their own unique capabilities to deliver a transparent end-to-end payments view to clients.

The transformation goes far beyond a payment itself. The end focus is data visualization: getting the information to the people who need it in your organization for various purposes, when, where and how they need to view it. Achieving data visualization requires going far beyond the transaction. J.P. Morgan is bringing its vision for unlocking the value of payments data for our clients’ benefit into reality. Crossborder payments now fit into this transformation.

Where and how can I view the data?

Transaction visibility is the beginning of the story. But providing value-add beyond the payment starts with the end in mind. The idea of data visualization is to structure data so that it is meaningful to the user. In the case of payments, the data users are typically spread throughout your organization. They have different needs for the data, and they view it in different formats through various devices, or data communication may be machine-to-machine.

The old model has been for users to log on to a portal or web site, download data, and convert it to various formats for distribution. Today’s clients don’t want to plug into their banks. They want their banks to deliver data on demand into their context. Ideally a payments tracking capability is an extension of this: a just-in-time data delivery system that parses details into the right format, delivered to the right people within their workflows.

To achieve this banks must convert their entire approach. They must become highly flexible in order to convert and deliver data how, when and where needed. This, in turn, requires a different technology infrastructure. Data pools, data transformation and connectivity directly to a clients’ context through APIs are enabling this approach to information delivery. For example, a bank can deconstruct information into the exact details needed, in the precise format, and deliver it to your treasury workstation, to management dashboards, operations staff within their processing flows, and call center screens.

What can I do with the data?

Track and trace enables simplification, greater efficiency, and process improvements for the users of the data. Areas impacted include:

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Timely transaction reconciliation

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Treasury
management

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Collaboration between payers and payees

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Big data analytics to improve processes



Rather than lagging days to weeks behind, it becomes feasible to move transaction reconciliation towards real-time.



A clear view of cross-border payments supports corporate treasury in optimizing payment flows. This, in turn, facilitates the optimization of cash, liquidity and risk management. It enables the ongoing treasury shift from a transactional to a strategic role as the focus shifts from waiting for information to acting on it with greater precision and planning.



The ability to see the status of a payment in real-time has a knock-on effect on the relationship between payer and payee. It allows for closer coordination and collaboration. For example, it can enable the supplier to release goods faster where normally they would be held at port awaiting payment confirmation. Track-and-trace eliminates these kinds of scenarios.



As companies use vast data pools and machine learning to find patterns and make enhancements, data feeds are moving towards faster processing. Cross-border payments data now can feed Big Data analytics to give better information on vendor and customer behavior, fraud threats, counterparty risks, and other insights.

Rather than lagging days to weeks behind, it becomes feasible to move transaction reconciliation towards real-time.

A clear view of cross-border payments supports corporate treasury in optimizing payment flows. This, in turn, facilitates the optimization of cash, liquidity and risk management. It enables the ongoing treasury shift from a transactional to a strategic role as the focus shifts from waiting for information to acting on it with greater precision and planning.

The ability to see the status of a payment in real-time has a knock-on effect on the relationship between payer and payee. It allows for closer coordination and collaboration. For example, it can enable the supplier to release goods faster where normally they would be held at port awaiting payment confirmation. Track-and-trace eliminates these kinds of scenarios.

As companies use vast data pools and machine learning to find patterns and make enhancements, data feeds are moving towards faster processing. Cross-border payments data now can feed Big Data analytics to give better information on vendor and customer behavior, fraud threats, counterparty risks, and other insights.

Where is my transaction?

You must have the ability to see a transaction before you can utilize the data. Banks can now provide a track-and-trace capability, enabled by SWIFT gpi, for cross-border payments. Key elements include a unique end-to-end transaction reference (UETR), which ensures traceability, and confirmation of beneficiary receipt of a payment. Cross-border payments transparency translates into greater efficiency, better control and faster resolution of payments-related needs. Illustrations of the benefits of track-and-trace include:

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Client service

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Control



A simplified payments experience results in improved communication between payment counterparties and with your bank, as well as more efficient processes. In the past, not seeing a transaction could lead to payment delays even when the beneficiary had not received the funds. This would trigger a status inquiry from your counterparty to your company, and from your company to your bank. Track-and-trace can reduce inquiries about beneficiary non-receipt of funds.



A Stop and Recall service strengthens security in the case where payment processing has been completed but not yet credited to the beneficiary’s account. In the past a bank would initiate a request to recall a payment to an intermediary or beneficiary bank, not knowing where a payment is en route. The process would take days and would be opaque to the client. Using SWIFT gpi means that the request to stop and recall a payment goes through SWIFT to stop further processing. Banks can report the status of a recalled payment to their clients.

A simplified payments experience results in improved communication between payment counterparties and with your bank, as well as more efficient processes. In the past, not seeing a transaction could lead to payment delays even when the beneficiary had not received the funds. This would trigger a status inquiry from your counterparty to your company, and from your company to your bank. Track-and-trace can reduce inquiries about beneficiary non-receipt of funds.

A Stop and Recall service strengthens security in the case where payment processing has been completed but not yet credited to the beneficiary’s account. In the past a bank would initiate a request to recall a payment to an intermediary or beneficiary bank, not knowing where a payment is en route. The process would take days and would be opaque to the client. Using SWIFT gpi means that the request to stop and recall a payment goes through SWIFT to stop further processing. Banks can report the status of a recalled payment to their clients.

Beyond the transaction

Payment tracking and traceability has arrived for cross-border payments. J.P. Morgan has been an early proponent of SWIFT gpi, a lead participant in its development, and an advocate for its broad adoption by the financial industry. Building on SWIFT gpi, an expanded track-and-trace capability is enabling cross-border payments to fit more seamlessly into the end-to-end client experience and create value across your organization. It’s just one part of how we’ve been transforming our approach to payments, data and how we serve our clients.

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