Ripple (XRP) vs. SWIFT: The race for largest market share in cross border payments
Ripple (XRP) is headed for some fierce competition in the cross border payments landscape. And in this race to grab the largest market share in this landscape, Ripple is giving fierce competition to SWIFT. One of the largest financial messaging systems in the world, the SWIFT international payment network enables international payments via its network. And competition is the best way to bring out the best products. While this is a good thing, Ripple does seem to be swimming in troubled waters. A new lawsuit was filed against the Blockchain based start-up recently claiming that their XRP tokens are securities.
The increasing number of Blockchain based start-ups in the financial space have given the old payment processing companies a rude awakening. The sad reality for these organizations is that their market share is being taken over from right under their noses. Ripple is one of those Blockchain based platforms that’s transforming the cross-border payments space.
SWIFT’s new worry: xCurrent by Ripple
Unlike other digital currency platforms, XRP platform is developing distinctive, custom made products designed to transform the banking industry. xCurrent, their payment software through which banks can message and settle their transactions quickly, efficiently and transparently is giving SWIFT headaches. Banking institutions affiliated with RippleNet use xCurrent to send and receive payments across borders at low costs and without any fuss.
Along with bidirectional messaging, Ripple’s software has added special features which gives enterprise users the option of end-to-end tracking. Additionally, all transactions are standard throughout the entire platform because of the addition of the Rulebook.
Ripple’s Product Management Vice President Asheesh Birla says they’re looking to increase the number of affiliate banks every week. He says this way, the company’s product uptake will increase. It appears that this competitive edge Ripple has over its rivals, particularly SWIFT, will give the company a global face.
Market Repositioning at SWIFT
SWIFT has made a name for itself in the international payment market over the last 45 years that it’s been in business. Ripple on the other hand, is just starting out, so this brand value gives SWIFT a competitive edge over them. But what sealed their doom is Ripple’s adoption of Blockchain. While it was perceived initially that it’ll complement the current banking system, but the cryptocurrency company takes it a step further. The current banking system is plagued with failures and issues. They plan to leverage these failures in the SWIFT’s system and seal the existing gaps in the marketplace.
Harry Newman, Head of banking at SWIFT set the records straight, saying,
“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.”
SWIFT clearly has caught up and is working towards restoring their past glory. They’re working on improving transaction speeds and efficiency by introducing Global Payment Innovation (GPI) into the system. They plan to roll this out across its 165 affiliate banks. The innovative GPI system currently handles 40% of the transactions across the world.
Ripple’ advantage over SWIFT
Though it’s been just 10 years since Ripple came into the market, they’ve collaborated with over 100 banking institutions. New affiliates are added weekly and this could prove to be a big obstacle for SWIFT in less than 2 years. However, both organizations are taking different routes to market their products. Ripple is riding on the blockchain train while SWIFT is not.
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.”
But Ripple is still going strong in this race. Their speed of transactions, reliability, lower cost of transacting, makes the Blockchain platform a strong contender in the race.
Image via Shutterstock
Join our telegram group.