SWIFT admitted to next phase of tender for connectivity to TARGET services

Thursday 11 April 2019 14:01 CET | News

SWIFT has been admitted to the next phase of the tender process to provide connectivity services to all Eurosystem market infrastructures (also known as TARGET services).

The public tender process for ESMIG Network Service Providers was launched in late January 2019 by Banca d’Italia acting on behalf of the Eurosystem. If successful in the next phase, SWIFT will be awarded a concession to provide ESMIG connectivity services from November 2021, becoming a Network Service Provider for the Eurosystem’s TARGET Services. Combined with SWIFT’s existing connectivity to EBA CLEARING’s EURO1/STEP1, RT1 and STEP 2 services, this would allow banks to rely on SWIFT to process all of their euro payment messages – high-value payments, SEPA payments, instant payments and cross-border payments.

By using SWIFT to connect to TARGET Services, users will gain a single-window for connectivity not only to the Eurosystem’s TARGET Services, but to 254 market infrastructures world-wide and to SWIFT gpi for cross-border payments.

SWIFT is committed to supporting its customers through their TARGET consolidation projects and the migration to ESMIG, providing access to TARGET Instant Payment Settlement (TIPS) for instant payments, TARGET2 (T2) for high value payments, TARGET2-Securities (T2S) for securities settlement, and the future Eurosystem Collateral Management System (ECMS).

SWIFT customers will also have access to a wide range of products and services, including impact assessment, integration, standards translation, validation services and testing.

TARGET Services are a number of services developed and operated by the Eurosystem which ensure the free flow of cash, securities and collateral across Europe.

These financial market infrastructure services include TARGET2 (the real-time gross settlement (RTGS) system for settling payments), T2S (the securities settlement platform) and TIPS (the service for instant payments). All of them settle in central bank money.

TARGET consolidation is a project launched by the Eurosystem to consolidate TARGET2 and T2S, in terms of both technical and functional aspects. The objective is to meet changing market demands by replacing TARGET2 with a new real-time gross settlement (RTGS) system and optimising liquidity management across all TARGET Services. The new RTGS system will offer the market enhanced and modernised services. The messaging standard ISO 20022 will be used, which is also the case for T2S and TIPS. The new consolidated platform will be launched in November 2021.
The Eurosystem will also introduce a number of components that will be shared across all TARGET Services:

  • A harmonised interface – the Eurosystem single market infrastructure gateway – will make it easier for participants to access and use the Eurosystems services from a single entry point.

  • The interface will support multi-vendor connectivity, allowing for participants to choose between different connectivity options and fostering competition among network service providers.

  • Common reference data will reduce the effort required to create and maintain multiple copies of reference data and will centralise the management of user access rights.

  • A common data warehouse will make it possible for participants to access historic information.

  • A common billing system will help the Eurosystem optimise its operational costs.

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Keywords: SWIFT, TARGET services, payments, cross-border payments
Countries: World