Payment Pre-validation

What is Payment Pre-validation?

Payment Pre-validation is an advanced solution designed to enhance the accuracy and efficiency of payment messages by verifying critical data before payments are sent. The pre-validation process helps reduce errors, minimize delays, and deliver a seamless payment experience. It works by mitigating the risk of rejected payments due to missing or incorrect information and can even help detect potential fraud.

The process involves either relying on data from other service users for validation or using a centralized Swift-managed dataset. Users participate as either data providers or consumers, ensuring that beneficiary account details and other payment information are correct before transactions proceed.

Why Should Banks Be Using Payment Pre-validation?

IntellectEU payment experts suggest implementing payment prevalidation as a first port of call, as this can save institutions time and cost almost immediately by allowing the verification of details such as beneficiary account information and name, prior to the payment being sent to the network.
This can help banks to significantly reduce the time and cost associated with payment investigations, typically required due to errors in payment data. And by pre-validating information upfront, banks ensure that funds reach their intended destinations without issues, leading to higher customer satisfaction and confidence.

Payment Pre-validation offers tools like Beneficiary Account Verification, Payment Validation based on jurisdiction-specific rules, and Fee Prediction, which provides upfront insights into interbank charges.

The Challenge of API Integration

Payment Pre-validation streamlines the payment process, reduces friction, and helps banks deliver a more reliable service to their customers. But these features are currently operated solely through API calls as part of the Swift Essentials offering. As such, implementing Payment Pre-validation requires a Swift Essentials subscription, and for financial institutions to integrate the necessary Swift APIs with their existing systems. The complexity of this task can often delay service delivery, hindering a bank's ability to provide timely and accurate payment services to their customers.