SWIFT Announces Rebate, as 2013 Volumes Hit Record High 5 Billion Messages

Price reductions attributed to driving its traffic volumes to a record high of five billion messages a year in 2013,

SWIFT

The member-owned SWIFT cooperative operating the SWIFT protocol used by major financial institutions to transfer money between banks, has announced its 2013 rebate to users, and its further substantial price reductions which entered into effect on January 1st, 2014.

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The 10% rebate on 2013 messaging fees will return approximately EUR 33 million to SWIFT member users worldwide, and will be paid in March 2014, as per the official press release this morning.

Full-year 2013 FIN message traffic growth is above 10%, as per the official press release which noted how SWIFT recorded its latest traffic peak on the 20th of December, 2013, when it processed 22.68 million FIN messages, and price reductions were attributed to driving traffic volumes to a record high of five billion messages a year in 2013.

The new 2014 pricing that just went into effect yesterday, originally announced on September 16th, 2013, is aimed to further reduce member’s costs by an average of 20% during 2014.

Example Graphic of Swift 2012 Flows [source: SWIFT]
Example Graphic of Swift 2012 Flows [source: SWIFT]
Products of the Belgium headquartered SWIFT cooperative are used by more than 10,000 financial institutions and corporation in 212 countries, to enable its clients to exchange information securely while bringing market participants closer together, and widely used for various transfers of foreign exchange and related securities between financial companies.

Commenting in the official corporate press release, Gottfried Leibbrandt, CEO of SWIFT said, “Through a combination of innovative operational efficiencies and robust volume growth.”

 Gottfried Leibbrandt, CEO of SWIFT
Gottfried Leibbrandt, CEO of SWIFT

Mr. Leibbrandt added in the announcement, “SWIFT continues to pass on savings to users in the form of substantial structural price reductions. In addition, for 2013, we are announcing a 10% rebate to all customers. We believe that our commitment to long-term price reductions confirms SWIFT as the preferred partner for financial messaging worldwide.”

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SWIFT’s CFO, Francis Vanbever, added in the press release regarding the value passed back to clients, “This rebate, together with the structural price reductions already announced for 2014, is part of the multi-year strategy set out by SWIFT in 2010 to reduce message prices by half by 2015. We are on target to achieve this goal.”

SWIFT Costs Get More Affordable for Members

Highlights of the main pricing actions in 2013-2014, according to the press release include:

  • An average 20% price reduction for FIN messages, generating EUR 52 million in savings to customers in 2014.
  • Upgraded Hardware Security Modules are being provided with substantial discounts, to all SWIFT customers.
  • Increased discounts for high volume bilateral links.
  • A Fixed Fee programme for large users will continue to offer substantial discounts.
  • Reductions of up to 40% for the transmission of very large files.

In December of 2013, SWIFT reported how RMB trading as a world trade finance currency in value – had surpassed the Euro (EUR) in traditional trade finance during October 2013, becoming 2nd in ranking after the 1st place was held by the USD, and pushing the EUR ranking to 3rd place, after the CNY jumped two spots up from 4th place in January 2012 (see excerpt below).

While as a world payments currency, the RMB remains at 12th place at just over eight-tenths of a percent of its global market-share (via SWIFT) according to SWIFT Watch compiled data for October 2013.

RMB SWIFT November 2013 [Source: SWIFT]
RMB SWIFT November 2013 [Source: SWIFT]
 SWIFT Transfers a Popular Method for Traders Moving Larger Amounts

The acronym, attributed to the Society for Worldwide Interbank Financial Telecommunication (SWIFT), and products offered under the SWIFT network are not limited to retail and corporate wire-transfers services using SWIFT (as commonly known by traders/investors) but also include an array of financial instruments through its platforms and services — catering mainly to the buy-side/sell-side space and banking sectors (financial services,etc..).

Although it’s not clear whether the savings passed on to firms will enable savings to subsequently be passed down to end-users (such as lowered cost for bank wires via SWIFT, offered by banks,etc…) as operational costs on the level of the SWIFT member institution must be taken into consideration and will naturally vary from one firm to the next.

However, in an environment where the costs for payment processing and related networks and protocols are racing towards zero costs – as a result of technology and competition, it’s a safe assumption that such rebates issued by SWIFT could help indirectly (or directly) benefit its members end-users.

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