Swift: Trends impacting Trade and Correspondent Banking

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03 January 2012

By Chris Conn, Sr. Business Manager, Banking & Corporate Initiatives – Americas, SWIFT

Traditionally, payments related to Trade Finance transactions over the SWIFT network are generally considered the Category 4 and 7 messages. But trade bankers have always maintained that a percentage of customer payments (MT103) on SWIFT are related to the settlement of cross-border merchandise-trade transactions.

What types of payment can be found in the SWIFT customer payment (MT103) messages? Most would agree that customer payments are comprised of person-to-person payments, payments for services, non-bank FX or securities settlements and merchandise-trade payments. When bankers were asked what percent of their customer payment volume is merchandise-trade related, their anecdotal responses ranged from 25 to 75 percent. This large range is a reflection on the product and customer mix for a given bank. Unfortunately for the industry, there is no exact mechanism to measure the number of these open-account trade-related customer payments but the overall volume trends is indicative. The volume of customer payments...

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