The growing popularity of blockchain has led to a disruption in many industries with the financial sector emerging as the most affected sector. There are many blockchain companies enticing technology enthusiasts with their open-ledger framework, though, the success story of Ripple deserves special mention here. The company has adapted to the needs of the banking sector, and unlike other blockchain companies, Ripple is working closely with banks and financial institutions to improve their interbank payment transfer system. Solutions proposed by the Ripple have indeed enhanced the payment efficiencies although the company is pitted against the behemoth of the payment industry SWIFT – an acronym for Society for Worldwide Interbank Financial Telecommunication.
SWIFT is considered one of the most coveted names in the field of interbank financial transactions and has been operating in the industry since 1973. As of now, SWIFT has an advantage over the Ripple in terms of a worldwide network which includes around 11,000 banks and financial institutions across 200 countries. This ubiquitous network is one of the key pillars for SWIFT and in the month of December last year, SWIFT recorded 34.16 million financial transaction messages daily which translated into an annual increase of 10.4%.
Despite having a worldwide network, SWIFT lacks in operational and procedural efficiency that one can have from Ripple. Banks complaints long delays stretching between hours and days while completing the transactions on SWIFT network. Further, the procedure adopted by the company in order to process cross border payments is quite costly in nature and also a bit opaque in terms of disclosure of the information. And this is exactly where Ripple is targeting to break SWIFT’s supremacy. With around 200 global banks becoming part of the RippleNet, the company is confident of giving a tough competition to SWIFT in the future. Currently, Ripple offers three blockchain payment solution to banks. xRapid is primarily focussed on the remittances across borders while xCurrent allows the payments across the borders with tracking facility. xVia, the third service, is the payment interface offered by the company to the banks, retailers, or any other third party who use the standard interface for making the payments. In order to provide quick money transfer between the banks, Ripple uses its own XRP cryptocurrency.
Alarmed by growing popularity of blockchain, SWIFT has also swung into action and announced the launch of its latest upgrade to its payment transfer service, global payment innovations (GPI). This new upgraded version enhances the speed while providing better traceability and transparency in the system. This also helps in carrying out various reconciliatory tasks and improving the predictability of business. In fact, the company has received a huge response from the banks with over 3,500 banks have already made their commitment to using GPI. On blockchain front, it’s not that SWIFT is not doing anything although it is not openly embracing the concept of open ledger technology. Despite its denial, one thing is very clear that SWIFT is taking the blockchain challenge quite seriously and working to overcome challenges posed by Ripple’s expansion.