As the old the old adage goes, competition is healthy and the consumer is always the beneficiary. Ripple (XRP) and SWIFT appear to be headed to the long awaited fierce competition on who gets the largest market share in the cross border payment landscape.
The increased blockchain technology uptake, old payment processing companies appear to have woken up to the sad reality that their market share is being shared behind their backs. Ripple has been partnering with banks through their xCurrent messaging platform.
Ripple (XRP) xCurrent, a Headache to SWIFT
Ripple, unlike other digital coin platforms has developed unique custom made products designed for the banking industry. The xCurrent massaging software is what is giving SWIFT headaches. This is the tool being used by affiliate Ripple banking institutions to send and receive payments across borders fuss free.
Ripple has gone a step further by adding special features in the software that enables enterprise users to take advantage of bidirectional messaging with an end-to-end tracking option. Ai addition, the Ripple developer team as added the Rulebook to ensure all transactions are standard throughout the entire platform.
According to Asheesh Birla, the Product Management Vice President at Ripple, they are increasing the number of affiliate banks on a weekly basis and this will increase the company product uptake. A competitive edge over the competition and in particular, SWIFT, appears to be giving Ripple a global face.
SWIFT Market Repositioning
For the last 45 years, SWIFT has been in the international payment market and its brand has been embraced over the years. This gives it a competitive edge of the rival, Ripple. Initially, blockchain was perceived a complementing the existing banking system but Ripple has gone a step further, to correct SWIFT failures and seal the existing gaps in the marketplace.
To set the records straight, Harry Newman, Head of banking at SWIFT says:
“It is no secret that correspondent banking is a 1998 model and we are busy addressing that, bringing it to a 2018 model. But in terms of speed, what problems are you trying to fix? We have our own cloud and API solutions and are already doing payments in minutes or even seconds.”
It is clear that SWIFT is working towards restoring their past glory by working on improved speeds and efficiency by introducing Global Payment Innovation (GPI). This is set to be rolled out across its 165 affiliate banks. The innovative GPI system is currently handling 40% of transactions globally.
Ripple Edge over SWIFT
Ripple has been in the market for less than 10 years and been able to bring onboard over 100 banking institutions and adding a new affiliate every week and this could hit on SWIFT is less than 2 years to come. However, the two competitors are taking different route to market vehicles; Ripple is riding on blockchain while SWIFT is not and according to Newman:
“[Blockchain technology] is not straightforward to scale and it is not yet appropriate to do so. All the announcements [by banks about their blockchain payments projects] made to date; they are either in-house or bilateral projects between banks. As you bring scale, you get escalating complexity.”
To make its intentions clear, Ripple inked a partnership with Banco Santander, a messaging service provider to help increase the platforms’ footprint in the United Kingdom, Spain, Poland and Brazil. These countries apparently lead in international money remittances.
Banco Santander has over 100 bank affiliates and this should keep SWIFT worried going forward. However, speed, reliability and near zero transaction costs appear to be the backbone of the blockchain outfit. However, the ever evolving consumer has the final word; they appear to benefit from the competition and to them, the future looks bright.