What does SWIFT partnering with R3 mean for Ripple and XRP?

Announced during the Paris Fintech Forum earlier today, SWIFT CEO Gottfried Liebbrandt stated his company has partnered with R3 that will see SWIFT making use of R3’s Corda platform, but what does all this mean for Ripple and XRP.

Starting at the top, global payment network SWIFT revealed its plans of launching a proof-of-concept of a gateway called GPI Link that will enable blockchain technology firm R3 to link to GPI payments from their own platform. This essentially means that obligations that exist for a Corda user can now be settled using XRP.


CEO of R3, David Rutter commented on their trial with Ripple several months ago:

“The tradition of holding numerous currencies across multiple accounts in different countries is costly and inefficient. This is a legacy issue from a time when the technology did not exist to offer a viable alternative; however, digital assets and distributed ledgers can now enable real-time exchange of currencies between parties anywhere in the world without the need for a third-party intermediary. This prototype paves the way for a major overhaul of how banks process and settle cross border payments.”

David Schwartz, Chief Technology Officer at Ripple explained on Reddit several months ago what something like this would mean for the future of the company. He stated that the primary reason Ripple is working in the payments space is that the current payment technology isn’t good enough to fully realize the benefits of XRP. Now, instead of fighting SWIFT for the development of a more sophisticated network, Ripple will instead be able to dedicate more reources to the execution of their XRP strategy.


Senior Vice President of Global Transaction Banking at CIBC summed up the benefits in a statement, saying, “A more efficient global payment system is all about making payments faster, easier and more transparent for businesses and consumers. Using innovative technology to rethink traditional processes is exactly what’s needed to give businesses everywhere an easier way to send and receive payments, and we are very active in making that a reality for our clients.”

But this news doesn’t only mean good things are coming to Ripple. For SWIFT, with 10,000 banks in its network, to use XRP may be just be what the market needs to get out of the current bear market, and may even pave the way for regulatory clarity that the industry so desperately needs. Additionally, mainstream media will have the opportunity to report on the real-world adoption and legitimacy of blockchain and cryptocurrencies.

All this means that, once the news broke, XRP surged around 9.74% in less than an hour. At the time of writing, XRP is up 9.06% and trading at $0.318.


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Author: RICHARD ALLEN
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Ripple and Swift Get Set for Epic 2019 Debate on the Future of Cross-border payments

Ripple Labs Inc., one of Silicon Valley’s most valuable start-ups, and global payment infrastructure Swift – will go head-to-head at the 1TC Conference in Rust, Germany.

Marjan Delatinne – Global Head of Banking at Ripple and Wim Raymaekers – global head of banking at Swift will give their two cents on the future of cross-border payments. The two are perhaps unknown outside technology circles but are outspoken figures.

According to Daily Hodl, the event organizers confirmed that the two international payments giants which have been at war with each other would discuss the following.

“How will technology affect our daily lives as treasurers, with the banking sector challenged by new concepts and ideas? Are established banking structures going to be turned on their head? SWIFT and Ripple take a look at the future of global money transfers and propose that their specific concepts are set to replace all other approaches. What will the future look like?”

CEO and founder of corporate Treasury management company Bellin – Martin Bellin – will moderate the debate – which is set to take place in February.

Ripple wants to overtake Swift

Ripple,(XRP) has been intensifying its efforts to replace Swift as the de facto network for international payments. While Swift underpins the movement of trillion of dollars on a daily basis, it is extremely slow, expensive and inefficient. Ripple, on the other hand, claims to enable instant, secure and almost free cross-border transactions. The company uses its native token XRP as a proxy for customers looking to convert fiat money. And, it has already partnered with dozens of financial institutions worldwide including PNCAmerican Express and Standard Chartered.

According to the CEO of Ripple Brad Garlinghouse, Ripple is looking to push Swift out of the remittance market completely and dominate the international payment industry. “What we’re doing and executing on a day-by-day basis is, in fact, taking over Swift,” he said.


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Author: Solomon Magawi
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TransferWise Co-Founder: ‘If Every Bank in the World Was Connected to the Ripple Network, It Would Be Amazing’

On Monday (19 November 2018), Taavet Hinrikus, the co-founder and chairman of UK-based cross-border money transfer company TransferWise, explained why his company is not yet using blockchain technology.

Hinrikus, who, until a year ago, was the former CEO of TransferWise, presented his thoughts on the potential application of blockchain technology for cross-border payments while giving an interview on the latest episode of Fortune’s online show “Balancing the Ledger”.

TransferWise was founded in the UK in 2011 by two Estonians friends who were working in London but needed to send money between UK and Estonia. And since they found the existing solutions to the cross-border payment problem too slow and/or expensive, they decided to quit their jobs and set up their own business:

“They’re both from Estonia. Taavet was the first employee at Skype, so he got paid in euros. But he lived in London, and needed pounds to pay the bills. Kristo worked for Deloitte and lived in London. He got paid in pounds, but had a mortgage back in Estonia. He needed to pay that in euros. Every month they moved their money the old way – which wasted their time and money. So they invented a beautifully simple workaround that became a billion-dollar business.”

“Each month, they looked up the actual exchange rate on Reuters. Taavet put his euros into Kristo’s Estonian bank account, and Kristo topped up Taavet’s UK bank account using his pounds. Both got the currency they needed almost instantly, and neither paid an extra cent on bad exchange rates or unreasonable charges. There was no waiting, no stress, and no extra costs. ‘There must be others just like us…’ they thought. The rest is TransferWise.”

Today, TransferWise, which counts Richard Branson and Peter Thiel amongst its investors, has over four million customers who “move more than $4 billion dollars every month, and “11 offices, with over 1,300 employees, across 4 continents.”

In yesterday’s interview on “Balancing the Ledger”, Hinrikus explained that right from the start, he and his fellow co-founder realized that they needed to build their own infrastructure:

“So, in every country, we try to connect to the payment network… And if we are lucky, we can do it in real-time in many countries [that] we are in… You can send money from Australia to UK… it’ll be there in 15 seconds… If you are a customer of a bank, that seems like the future has arrived.”

He then explained why the SWIFT network, which is used by the vast majority of banks in the world for cross-border payments, is so slow:

“Banks use the SWIFT network, which is great [since] the money eventually gets there, but many people touch the money in between, and everyone takes a cut, everyone keeps the money for a day. Using TransferWise, because we plug in directly in every country, we can do it really quickly, and the cost is typically 10 times less than using a bank.”

Hinrikus was then asked if his company had evaluated the use of blockchain technology and/or cryptocurrencies. He replied:

“Yes, I mean, obviously, we’ve heard this dream many times from different people. However, if you start digging into it, you realize it may look great on paper, but in reality to make use of is really hard… So, we’ve looked at different blockchain technologies, but yet we haven’t seen anything that enables us to do what we do in a way that is cheaper or faster.”

He was also specifically asked if he had looked at solution from Ripple and Stellar. He answered:

“Today… there’s not widespread adoption for any of these. If every bank in the world was connected to the Ripple network, it would be amazing. Yet, how many banks today are using Ripple in production is a very short list… In that sense, we’re big supports of Ripple or anything else… We know the Ripple team. We know the other teams. And if any of these gets enough adoption [such that] it actually materially helps us to do things cheaper and faster, we’d love to, but so far, we haven’t found one.”


Source
Author: Siamak Masnavi
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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.”


Source
Author: Siamak Masnavi
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Ripple and Swift Continue to Battle It Out For Dominance In The Banking Industry

The just concluded Money 20/20 highlights a global paradigm shift in the way money transfers are currently being conducted and the future of the financial industry. Global leaders in card payment services such as American Express, have integrated blockchain based systems to solve the latency issues of the previous non-blockchain system. Ripple’s xCurrent is now part of the American Express back end infrastructure powering the payment platform.


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Also to note, are the predictive comments of Ripple CEO, Brad Garlinghouse, when he said that dozens of banks will be using their payment solution software of xRapid by next year.

Such a statement can only mean that Ripple products are going to replace a current existing payment system. This payment system is the traditional SWIFT.

Swift has been the darling of banks for close to 5 decades now. It is one of the largest financial messaging systems in the world. Financial institutions use it to securely transmit information and instructions through a standardized system of codes. The service is not only used by Banks, but by Brokerage Institutes and Trading Houses, Securities Dealers, Asset Management Companies, Clearing Houses, Traditional Forex Exchanges just to name a few. But payments on the platform take anywhere from 1 to 3 days making it easy for Ripple to encroach on Swifts dominance.

Transactions on the Ripple network are as quick as 2 – 3 seconds; as cheap as $0.0004; traceable and secure on the blockchain. The delay extra minutes during the transaction are due to the proprietary systems at each end of the transaction that belong to the financial institutions. This is the case during the xRapid tests that recorded transaction speeds of 2 – 3 minutes.

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In an attempt to counter Ripple, Swift has introduced a new service called Global Payments Innovation that is being used by 165 banks. Half of the transactions on this new service reach the destination within 30 minutes. Swift is still sceptical about blockchain technology particularly on how to accommodate its 11,000 member banks. The company says the solution would have to come from building over 100,000 sub-ledgers for the set number of banks. However, Ripple dealt with the issue of scalability over 3 years ago and can accommodate a similar number comfortably.

Moving forward and what will determine which service comes out on top between Ripple and Swift, is the response of the financial institutions. Will they try out Ripple products like Santander, American Express, Moneygram and Western Union, or will they opt to ignore the emerging sector of blockchain technology completely?

The rivalry will surely continue for the better part of the future with each side innovating to beat the competition. This means in the long run, it is the best product that will win.

However, the tide seems to be on the side of Ripple as its solutions are more efficient than those of Swift.


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Author John P. Njui 
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