“Ripple is taking over from Swift” – so said Ripple's CEO Brad Garlinghouse in an interview with Bloomberg earlier this month. He claimed that financial firms are seeking faster, more up-to-date technology. As a result, Ripple is attracting many of Swift's customers, according to Garlinghouse.
In the interview with Bloomberg TV, Garlinghouse said: “The technologies that banks use today, that Swift developed decades ago, really haven’t evolved or kept up with the market. Swift said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.”
Ripple's payments network, RippleNet, connects banks and payment providers with its network run on advanced blockchain technology. It also has a growing global network, with more than 100 customers including many big bank names including UniCredit, Santander, Standard Chartered and SEB. This is a small fraction of Swift's 11,000+ customers, which include banking and securities organisations, market infrastructures and corporate customers in more than 200 countries.
Garlinghouse also boldly asserted that “What we’re doing and executing on a day-by-day basis is, in fact, taking over Swift.” He didn't address the ability of RippleNet to process the payment numbers currently handled over Swift's network on a daily basis. According to Swift, it has processed an average of almost 31 million FIN messages each day so far this year. Until RippleNet has the processing power in place to deal with that kind of traffic, it won't be a real contender for Swift.
Ripple believes that its blockchain-based networks, including xVia, which allows corporates and SMEs to send global payments in real time, will pose a viable alternative to Swift in future. But Swift is by no means watching from the sidelines. Its Global Payments Innovation (GPI) initiative was launched in January 2017. According to the organisation, GPI provides corporates with the following key features:
- faster, same day use of funds within the time zone of the receiving GPI member;
- transparency of fees;
- end-to-end payments tracking; and
- remittance information transferred unaltered.
To date, more than 300 financial institutions have signed up to Swift GPI and more than a million payments are sent over GPI every day, worth more than $110 billion. Swift has stated that GPI will be the standard for all cross-border payments by the end of 2020.
According to Bloomberg, Garlinghouse also dismissed any speculation of a potential collaboration between Ripple and Swift.
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