Ripple vs SWIFT: Brad Garlinghouse Feels Good About Ripple’s Chances of ‘Taking Over’ As Global Leader in Cross Border

In a recent interview with Bloomberg, Ripple CEO, Brad Garlinghouse, denied the rumors about Ripple partnering with SWIFT: “I think what we’re doing and executing on a day-by-day basis is, in fact, taking over SWIFT.”

Some Background Information About SWIFT

On its website, the Society for Worldwide Interbank Financial Telecommunication (SWIFT), a co-operative which was founded in 1973 and is headquartered in Belgium, describes itself as “a global member-owned cooperative and the world’s leading provider of secure financial messaging services,” and says that its “messaging platform, products and services connect more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories.”

On 10 December 2015, probably as a response to the growing threat from Californian Fintech startup Ripple, SWIFT announced a global payments innovation (gpi) initiative to “dramatically improve the customer experience in correspondent banking by increasing the speed, transparency and predictability of cross-border payments.” At the time, it said that gpi would enable corporates to “receive an enhanced payments service directly from their banks” with these features:

  • “Same day use of funds”
  • “Transparency and predictability of fees”
  • “End-to-end payments tracking”
  • “Transfer of rich payment information”

SWIFT said that the pilot for the gpi initiative would start in early 2016.

Currently, SWIFT claims that the benefits for banks and corporates that adopt gpi are as follows:

  • Fast payments (“Credit international beneficiaries in seconds and, at most, minutes”)
  • End-to-end tracking (“Track payments end-to-end in real-time”)
  • Fee and FX transparency (“See bank fees charged and FX rates applied”)
  • Unaltered remittance information (“Ensure remittance data is unchanged when payment arrives”)
  • Reduced Costs (“Benefit from reduced enquiry costs due to ability to track payments”)
  • Optimised liquidity (“Make the most of your liquidity through greater payments visibility”)
  • Ease of implementation (“Use your existing SWIFT setup and go live within three months”)
  • Confirmed credit (“Receive a credit confirmation message when your beneficiary has been paid”)

SWIFT also is reporting the following numbers for gpi:

  • “USD 100 billion+ are being sent every day using SWIFT gpi”
  • “gpi payments are being sent over 220 international country corridors”
  • “Banks’ enquires are reduced by as much as 50% as gpi payments are faster and fully traceable”
  • “Nearly 50% of SWIFT gpi payments are credited to end beneficiaries in less than 30 minutes”
  • “55+ payment market infrastructures are already exchanging gpi payments, enabling domestic exchange and tracking”

One number that it is not so easy to find on its website is the number of member banks that are currently using gpi; as of November 2018, this number is believed to be under 200.

According to a report in The Global Treasurer, one of the key takeaways from the SIBOS 2017 conference in Toronto was that corporates “do not want to pay excessively for access to SWIFT gpi.”

What Ripple Thinks About SWIFT

Ripple is not a big fan of SWIFT in general.

According to a report published on 26 March 2018 in The Global Treasuer, Marcus Treacher, Senior Vice President of Customer Success at Ripple, told them:

“SWIFT doesn’t really compete [with Ripple] in our view. SWIFT gpi has been around for a long time and it is making the SWIFT process a little less painful by adding more messaging and control into a 20th-century model… We are thinking about how money moves in a very different way. We are creating an internet of value… SWIFT gpi will improve things a little bit but it won’t really match the speed, efficiency and visibility that we create with the Ripple network, so we don’t look at them as a serious long-term competitor.”

As covered by CryptoGlobe, on 14 June 2018, Ripple’s Chief Market Strategist, Cory Johnson, in an interview with Yahoo Finance (as part of the “Yahoo Finance All Markets Summit: Crypto”), had this to say about SWIFT:

“Our competition is this banking consortium that came together in 1973… It’s called SWIFT… You know what it isn’t? It is not ‘swift’! It takes 3-5 days to move money… It’s one-dimensional messaging… It has about a 4% error rate… You send a message to move money, and then you wait, and maybe you get something back… It’s more akin to a homing pigeon than a text message or email.”

According to a report in Global Trade Review (GTR), later that month (on June 27th), Emi Yoshikawa, Ripple’s Director of Joint Venture Partnership, while speaking at an event in Hong Kong (EmTech Hong Kong), said that “the innovation cannot compete with the fintech company’s ‘near real-time’ settlements”:

“Swift was built 40 or 50 years ago, before the internet was created. So their architecture is very old. They realise that this is a big problem and they consider us a big competitor. They’re also trying to make a big improvement based on the existing architecture, called Swift gpi. We consider it just a marginal improvement of their existing architecture,”

Rumors About Ripple and SWIFT

On 6 November 2018, Finance Magnates reported that XRP fans were “excited by speculation that a competitor could soon be a partner,” and that this “appears to have been driven at least partially by a popular rumour on the internet – that an upcoming upgrade on the SWIFT network will make Ripple products available to around 4,000 extra banks.” However, Finance Magnates was told by a SWIFT spokesperson that these rumors were false:

“I’m not sure where those rumours are coming from but the upcoming standards release … is entirely unrelated to RippleNet. Its primary purpose is to ensure all payments include a tracking reference (UETR, Unique End-to-end Transaction Reference) which will allow banks to track their gpi payments end-to-end in real time.”

Ripple CEO’s Interview With Bloomberg

During the interview with Bloomberg, Brad Garlinghouse, the CEO of Ripple, was asked if “there is a possibility that Ripple could take over SWIFT one day.” He replied:

“Well, I think what we’re doing and executing on a day-by-day basis is, in fact, taking over SWIFT, in that we’ve now signed well over 100 banks, some of the largest SWIFT-enabled banks in the world are now using Ripple’s technology. Just last week, we saw a remittance company, who is using Ripple’s technology, they reduced the price per transaction to their customers from $20 per transaction to $2 per transaction, and they saw an 800% increase in usage overnight. That’s the type of dynamic that SWIFT isn’t able to support that we’re able to address right now.”


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Author: Siamak Masnavi
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