Preserving the obligatory passage point: SWIFT and the partial platformisation of global payments

Crucial for international trade, cross-border payments are conducted via the correspondent banking (CB) system, a decentralised network of bilateral agreements between more than 11,000 banks in different jurisdictions, and supported by a centralised messaging network (SWIFT). This global twin infrastructure consists of highly complex socio-technical and socio-spatial arrangements pressured to change, but resistant to it. Beset by inefficiencies, from which the gatekeeper incumbent banks profit, the international payments system lacked alternatives until the recent tech threat of disintermediation and re-organisation of legacy serial messaging chains to big data arrangements and centralising platformisation. We show how the CB/SWIFT nexus, an integral part of the financial and advanced services providers (FABS) complex and, as such, also a specific and important part of obligatory passage points (OPPs), creates and extracts monopoly rents, now and into the future. Challenged by new technology and the resulting push to re-form its (global) organisational architectures, understanding and conceptualising change in and of OPPs – here, the global payment infrastructure – is therefore vital. We capture the complex relationships between the CB and SWIFT for a better analytical understanding of change at the system level. Methodologically, the analysis draws on insights from an explorative research design, including 30 semi- structured expert interviews. We show that mobilising 11,000 banks across the globe to innovate and upgrade from rent extraction to new, forward-looking sources of profit, that is, data, is no straightforward process despite the governance of SWIFT to ‘nudge’ its member banks to preserve incumbency and, ultimately, its survival.