SWIFT expects to deliver a 57% price reduction on its messaging services by the end of 2015, exceeding the original target of a 50% price reduction set out by the company in 2010.
In 2010, SWIFT's strategy called for a 30%-50% price reduction between 2010 and 2015, a goal the co-operative achieved at the high end of the commitment in 2014, one year ahead of schedule. By the end of 2015, the total price reduction over the five-year period is expected to reach 57%.
SWIFT started its price reduction efforts in 1996 with a 30% decrease in messaging prices. Since 2001, these efforts have been greatly enhanced through formal price reduction commitments and well established pricing principles, including:
• Encouraging usage as opposed to maximizing profit.
• Recognizing the contribution of large users and their role in creating economies of scale.
• Maintaining the cooperative spirit and transparency.
• Reducing barriers to entry for smaller users.
• Responding to competitive threats.
• Being economically sustainable.
New five-year strategy
The new strategic five-year plan, SWIFT2020, challenges SWIFT to continue investing in the security, reliability, and growth of its core messaging platform, while making additional investments in existing services and delivering new and innovative solutions.
An additional part of this plan is the new long-term, structural price reduction program that will be put in place in January 2016. This is the fourth strategic pricing plan SWIFT has introduced to the community in the last 15 years. The new plan calls for a 30-45% price reduction by the end of December 2020, taking into account the necessary investments to grow the business.
"Strong traffic growth, rigorous cost controls, and innovative pricing schemes have allowed us to overachieve on the pricing pledge we set back in 2010, enabling us to pass on significant savings to our customers,” Francis Vanbever, CFO at SWIFT says. “Depending on market conditions, we are committed to a new price challenge of lowering prices between 30% and 45% by 2020, while also addressing our non-messaging services and products with innovative and targeted price actions.”
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