devised a program to help banks streamline low-value, cross-border payments. The program, dubbed SwiftPay, was unveiled at Swift's annual conference last week in Copenhagen. It is to begin operating in January, Swift officials said. The heart of SwiftPay is a standardized master agreement among participating banks that would replace existing bilateral legal payment pacts. A SwiftPay directory lists the payment instruction requirements and fees of each participating bank. Swift will charge banks a registration fee and update the directory data base. "This is the first step toward end-to-end (electronic) commerce," said Charles Mallis, global marketing executive at Chase Manhattan Bank and a U.S. representative to the Swift committee that designed SwiftPay. The program covers payments of $20,000 or less, but Swift expects it to cover larger payments in the future. SwiftPay guarantees end-to-end processing within six working days, and minimum levels for remittance advice information. Swift said it will referee disputes involving SwiftPay transaction, but it wasn't clear how the organization would enforce payment deadlines. Mallis said SwiftPay should also be useful for new developments like smart cards and electronic purses that aim to replace paper currencies with digital money. "This is a step in the convergence of wholesale and retail payment systems," added Mallis. "It is a paradigm shift, which I call 'instividualism' - institutional conduits generated through individual payments." Bruno Coessens, manager of payments markets for Swift, said SwiftPay grew out of talks between Swift and member banks that wanted a central repository of correspondent fees and requirements. The SwiftPay directory, to be available on diskette or CD-ROM, will contain specific payment information requirements for each country and the general requirements and fees of each bank. Privately negotiated fees will be encoded in the directory so that only the approved counterparty can read them, said Coessens. Swift will update the directory with electronic messages. SwiftPay should be very popular in Europe because it will standardize a fairly chaotic situation, bankers said. "To find a correspondent you need to find the appropriate bank in the country, agree on terms, and design the Swift message," said Pip Evans, manager of payments and cash management at Barclays Bank in London. "The ACH in each country is different." Banks can receive the directory without joining the SwiftPay program, Evans said. "If banks program this information into their messages, it improves my service," he said. And it gets Barclays a step closer to straight-through processing, which reduces costs. Although Mr. Evans hailed the replacement of bilateral agreements with a Swift master document, he said he is disappointed that Swift doesn't plan to take a more active role in policing the agreements. "They should be proactive with sampling and testing," he said. Tom Groenfeldt is a freelance writer based in Wyckoff, N.J.

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