Six Clovers, a decentralised global payments network, has announced the launch of its financial technology infrastructure connecting banks, merchants, and payment providers to transact in digital currencies around the world. Six Clovers allows organisations to fully integrate and enable real-time payments using the efficiency and scale of digital currencies, and expand their markets by offering fast and seamless cross-border payment capabilities.

The company is founded by former PayPal business and technology leaders Jim Nguyen and Nas Kavian, and is backed by investments from Borderless Capital as the lead investor with participation from BCW Group and Argentinian bank Grupo Supervielle, along with angel investors. The payment network is built on Algorand, a blockchain accelerating the convergence of decentralised and traditional finance.

"Six Clovers is a next-generation payments infrastructure that solves many of today’s challenges with domestic and cross-border payments, while opening up a whole new world of digital finance opportunities," said Jim Nguyen, co-founder and CEO of Six Clovers. "We equip financial institutions, payment providers, and merchants with a full-stack, blockchain native payment infrastructure to seamlessly and securely move and transact in digital currencies globally."

Where Six Clovers thinks it wins

A statement from Six Clovers noted that today’s financial institutions and businesses primarily rely on the SWIFT protocol for cross-border payments. This payment infrastructure has been widely adopted since its introduction in the 1970s and relies on multiple intermediaries to move money across the globe. Six Clovers says this transfer process is a long, multi-day journey across the network of banks, often spanning multiple time zones, with fees that must be paid to each intermediary along the way. 

Six Clovers hopes to win business from SWIFT with its launch of RAPID, a decentralised payment network enabling organisations to instantly move and transact digital currencies, built on the Algorand blockchain and stablecoin technology. Once integrated, businesses can connect to the decentralised finance (DeFi) ecosystem to enable fast, cheap, and secure cross-border payments.

"Six Clovers is creating a bridge between traditional and decentralised finance, expanding access to the next generation of digital products and services, an abundance of which we are seeing built on Algorand," said Steve Kokinos, CEO at Algorand. "We are excited to see SixClovers leverage Algorand's fast, stable and efficient blockchain architecture to build the next-generation decentralized payment network."

Features of Six Clovers’ RAPID instant payments network include:

• Payments, reimagined. Redesigned time-tested payment capabilities such as international payments, domestic payments, payouts, refunds, and much more adapted to blockchain technology. Organisations can seamlessly integrate RAPID with their existing payment platform.
• Blockchain native. Six Clovers’ RAPID is built on the industry-leading Algorand blockchain, which was designed for modern financial applications and provides the security, scalability, transaction finality and decentralisation required for RAPID users.
• Stablecoins. RAPID uses regulated stable coins including USDC to represent fiat on-chain, and enables the instant transfer of value between sender and receiver.
• Trustless. Transactions are peer-to-peer - reducing counterparty risk.
• High performance. The network can sustain nearly 46,000 transactions per second and can confirm transaction finality in approximately 2.5 seconds.
• Transaction and data privacy by design. All transactions adhere to the strictest global data privacy requirements.
• 24/7 Availability. Organisations can instantly send money 24 hours a day, seven days a week, 365 days a year, solving the issue of limited operating hours, and multiple timezones.

"The launch of Six Clovers marks a major milestone in helping existing financial institutions to get onboard with digital currencies, which are the future of finance," said David Garcia, CEO and managing partner at Borderless Capital, lead investor in Six Clovers. "Fuelling cross-border transactions with regulated stablecoins to represent fiat on-chain has never been done before, and is going to unleash a wave of mass blockchain adoption across banks, merchants, and payment providers as they see the need to embrace the digital future."

SWIFT's plans to retain its position

The Six Clovers news comes less than a year after SWIFT outlined its new strategy to deliver instant and frictionless end-to-end cross-border transactions, via a new Transaction Management Platform (TMP).

The cooperative plans to expand beyond financial messaging to provide comprehensive transaction management services. This approach is designed to support and accelerate innovation, paving the way for financial institutions - independently or in collaboration with fintechs - to create new value-added services to support their business growth. In payments, financial institutions will be able to expand offerings to businesses and consumers and enhance the end-customer experience. In securities, financial institutions will benefit from improved reconciliation, reporting and asset servicing processes as well as end-to-end visibility of transactions to reduce settlement fails and fines. 

SWIFT’s enhanced platform will orchestrate interactions between financial institutions and other participants to minimise friction, optimise speed and provide end-to-end transparency and predictability from one account to another anywhere in the world. This move has the potential to power instant and frictionless transactions between 4 billion accounts serviced by financial institutions across the SWIFT network. The next-generation digital platform will use APIs and cloud technology to provide a set of common processing services that banks have historically invested in individually, saving the industry time and money. New and extensive data capabilities will enable the pre-validation of essential data, fraud detection, data analytics, transaction tracking and exception case management. 

"We are innovating the underlying infrastructure that financial institutions use to make transactions run even faster end-to-end, and at the same time further reducing costs for the community through industry-shared services in the areas of cyber, fraud and compliance," commented Javier Pérez-Tasso, CEO of SWIFT. "We will introduce data innovation that embeds risk and control elements expected from SWIFT, creating peace of mind for business-critical operations. Combining these elements, we are creating a broad platform with faster technology and smarter and better services that the industry can trust as a foundation for innovation towards their own end-clients."

The planned platform capabilities build on SWIFT’s recent transformation initiatives, including SWIFT gpi, the benchmark in cross-border payments messaging, and leverage the cooperative’s reach across more than 11,000 institutions in 200 countries and territories. They will be underpinned by SWIFT’s continued investment in cybersecurity and risk management to ensure resilient and secure transactions. The cooperative says that users will benefit from the capabilities with minimal disruption through backward compatibility. At the time of the announcement, SWIFT also proved it still had the banks on side by providing the following soundbites in a statement:

"It’s good news that SWIFT is evolving from being a messaging carrier to a provider which supports our own Deutsche Bank transaction platform for international payments," said Stefan Hoops, managing director, head of Corporate Bank at Deutsche Bank. "Speedy, secure and compliant transaction management fits perfectly with our clients’ workflows and needs. We plan to connect SWIFT’s cooperative industry-wide solution with our own products and client services that manage payments for all types of financial institutions, corporates and fintechs."

"Citi is very supportive of this new path that SWIFT is embarking on," said Manish Kohli, global head of Payments and Receivables at Citi. "With its new platform strategy, SWIFT is evolving from just making incremental improvements to its traditional store and forward messaging capabilities and towards truly transformative change based on API dynamic connectivity, a vastly improved data model and extremely relevant ‘payment orchestration’ services. This reimagined SWIFT platform builds on the progress of gpi, and moves us towards our desired end-state of payment ubiquity with the ability to make frictionless and instant cross border payments across the SWIFT network. Citi is fully committed to working with SWIFT, the banking community, financial market infrastructures and governments to drive this critical transformation forward." 

"SWIFT is a key partner in helping our clients meet their business objectives in a quick and secure manner," added Thomas Halpin, global head of Payments Product Management at HSBC. "We support SWIFT’s new approach that focuses on innovation to deliver new services while maintaining resilience and security. We look forward to working with the SWIFT community to deliver even faster and more efficient payments for clients in the future."

Whether the brash young upstart of Six Clovers can unseat the incumbent in SWIFT will be an interesting story to follow as the payments landscape continues to become more digital and real-time.