Transparency: A Key Challenge in International Payments

By Frantz Teissèdre, Head of Public Affairs, Cash Clearing, Global Transaction & Payment Services and Sylvain Lassale, Head of Interbank Relationships

In the realm of international payments, transparency relates not only to transaction conditions (associated costs, time to reach the beneficiary, etc.) but also to tracking its progress. A study by Swift¹ shows that the top three reasons for abandoning a PSP are hidden fees, lack of clarity on exchange rates, and failed deliveries. Transparency regarding fees and exchange rates is considered more important than the cost of the transfer itself!

A Must for PSPs and Their Clients

Transparency is therefore a key requirement for improving cross-border payments. For PSPs, it is a commercial lever, as it reduces customer attrition and enhances loyalty. Lack of transparency frustrates users, who want to know the exact cost of their transaction and the amount that will be credited to the beneficiary. Knowing what they will pay before confirming the transaction—and what the beneficiary will receive—reassures them and improves the customer experience. As a result, they submit fewer billing-related investigation requests.

The complexity of international payments, involving various jurisdictions, technologies, market practices, and sometimes non-harmonised systems, can lead to 'truncation' of information. Clients, especially businesses, may struggle to automate invoice and payment reconciliation in their ERP (Enterprise Resource Planning) systems due to unexpected fees or incomplete data.

Moreover, transparency in traceability—particularly for SMEs—enhances the customer experience and strengthens trust in the PSP’s service. Just like tracking an online purchase, it is now possible to follow each step of a payment in real time until it is confirmed in the beneficiary’s account. Finally, having complete and untruncated information throughout the process helps combat fraud, money laundering, and terrorist financing more effectively.

Ambitious Goals Set by the G20

To meet the G20 roadmap for improving cross-border payment systems, regulators have set several targets to be achieved by the end of 2027, which PSPs must comply with. These targets revolve around four pillars: speed, accessibility, cost reduction, and transparency.

In terms of transparency, PSPs must provide at least the following information to payers and beneficiaries:

- Total transaction cost (including all fees: sending, receiving, exchange rate, and currency conversion);

- Expected delivery time of funds;

- Payment tracking status;

- Service conditions.

Currently, only 56% of payment services are transparent regarding both cost and speed². Routing an international payment remains complex, often involving multiple steps and intermediaries. PSPs face various regulations and currencies, sometimes in illiquid markets. Additionally, since payment tracking updates ('trackers') are not always instantaneous, PSPs cannot always provide users with real-time tracking of their payments.

Swift GPI Standard: A Catalyst for Transparency

This is precisely the purpose of Swift GPI (Global Payment Innovation). This service offers:

- Transparency, with intermediary costs communicated upfront to the payer;

- Real-time, end-to-end payment tracking;

- Confirmation of successful transaction execution to the payer.

Although PSPs have widely adopted this service, some transaction corridors still show varying service levels depending on the jurisdiction.

Migration to ISO 20022

To harmonise transactions, PSPs must adopt a common language for payment messages, which is not straightforward in decentralised exchange systems. This is why Swift encourages its clients to migrate to the ISO 20022 standard, providing a universal language. Data becomes richer, better structured, more detailed, and used uniformly. Operational efficiency improves through greater process automation, eliminating issues related to truncation or message formatting.

While no deadline is imposed on corporates, financial institutions must migrate to ISO 20022 by November 2025. Societe Generale has updated all its payment applications to meet this requirement.

Guaranteed Exchange Rate

As a PSP, Societe Generale is among the most active banks contributing to the deployment of Swift GPI and offers it as a service to corporate clients since 2017. To enhance its offering, the bank has developed services around Swift GPI, such as:

- The GPI Tracker, used by 200 companies, which enables real-time tracking of interbank flows on a 'metroline' from initiation to account crediting;

- The GPI PSR (Payment Status Report), offered to 500 clients to facilitate automated integration and reconciliation of interbank data with issued payments in ERP systems.

Since 2024, Societe Generale also offers its banking clients a currency exchange service via API (Application Programming Interface), available 24/7, allowing real-time simulations across around forty currencies. The displayed exchange rate is secured and guaranteed for 20 minutes, ensuring the payer has full knowledge of the applied exchange fees before confirming the payment.

The One-Leg-Out System: Towards Instant International Payments

Indirectly, the rise of instant payments also strengthens transparency. Executed in seconds and confirmed by an operation notice, instant payments are well developed domestically. PSPs are working to achieve the same internationally, in 24/7 mode.

Initiated by the European Payment Council, the one-leg-out instant payment scheme will enable PSPs to process incoming and outgoing international account-to-account transfers, instantly covering the euro-denominated part of a transaction.

Just like speed, accessibility, and cost, transparency is a key factor in promoting and developing cross-border payments. For PSPs, ensuring complete transparency throughout the transaction is a decisive competitive advantage. Indeed, two-thirds of clients say they would leave their PSP if the transaction included hidden fees, according to Swift.

1- https://www.swift.com/swift-lvp/assets/pdf/small_payments_big_opportunity_july_2023.pdf

2- https://www.fsb.org/uploads/P211024-3.pdf