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Ripple Have Dismissed The Idea Of Marginal Improvement


Blockchain payment network Ripple have dismissed an offer from their rival, Swift. They have claimed that their global payments innovation service is just a very small improvement on architecture that is actually really, really old. Swift’s own GPI does not use blockchain but they have managed to reduce the payment time to less than half an hour. They have done this over 50% of the time it has been used. With that being said, 100% of them were made and credited in less than 24 hours. Swift, who has been a payment messaging service for quite some time now, has come out to say that the GPI will be rolled out to well over 10,000 banks. Ripple’s director spoke at Hong Kong this week and they stated that the innovation cannot be completed without the near-real time settlements that are required. Swift was established well over 40 years ago and this is far before the internet was even created. This ultimately means that their architecture is very old. They know that this is a problem deep down, and that is why they consider Ripple to be such a huge competitor. They have also stated that they are going to try and make some big improvements in the future, but this is mainly to do with the architecture that they have. The new announcement that they have coming up is known as Swift GPI and it is a marginal improvement according to the head of the Ripple team. They have stated that the problems they are talking about mainly revolve around payment speed and efficiency. They have stated that these cannot be solved unless you change the infrastructure layer and this implies that blockchain is in fact essential.

Swift have experimented with blockchain a ton of times in the past and they have even launched their own proof of concept as well. They did this in 2017 and the results of this were encouraging to say the least. The problem is that this is not very convincing and the Swift research team have also come out to say that the technology is still in its infancy. Their team have kept a very open mind about their own future and this is encouraging, but only time will tell if anything actually comes from this. Ripple, in the meanwhile are a marginal player in terms of trade payments. They have worked with a number of top-tier trading banks and this includes the MUFG bank, the Standard Chartered Westpac bank and even the Bank of America. The problem is that this is very small when compared- but a number of banks in Asia are continually experimenting with closed networks, such as Ripple. They want to use a  blockchain software in a closed network and they also want it done according to rules, that will be predetermined. A RippleNet pilot was launched in May and MUFG bank is the Thai subsidiary. The global head of Standard Charter really does see huge potential in this, and that she believes that the world has come to a point where everything is about instant push notifications. She believes that billions of dollars are always moving across the world but you don’t really have any idea as to when they were delivered, or even who has it. You don’t even know what the charge is for most of the time, and this can cause real problems. At the event, Yoshikawa also outlined her vision to have a payment plan for the future. She believes that this would utilise blockchain and that it would also involve companies talking with one another to try and stop the whole thing from getting out of control.

She also went on to say that in order to realise the value that Ripple has, Ripple needs to expand. She believes that they are going to have to work with governments all around the world, and many different companies in order to bring the whole thing together and this is going to be a deal breaker for them. She was also asked by GTR if she thought that Ripple and Swift could actually end up working together. She said that Swift could be a part of the broader network, and that she would like to see the two working together. She would like to help them to facilitate this, but at the end of the day, Ripple is only meant for open systems. Swift is not like this at all, so it really does depend on how the whole thing is going to turn out. Swift did not actually respond to the comments that ere made, but Wim Raymaekers, who is the head of GPI has come out to say that they have told GTR that the company have decided to build the GPI system without utilising blockchain. Their reasoning behind this is that they want to deliver an instant service with immediate value to their clients.

The team also went on to emphasise that the goal for Swift isn’t actually to try and settle things in real time, it is all about creating certainty for businesses. The corporate companies out there are not asking for instant payments. They know that no payment will leave their company without having an invoice, and so they need to know when they can make that payment in advance. The problem here is that they need the payment to be made that same day, but they aren’t concerned as to how fast it is going to be made and this is going to be a major point in the future.


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