PaymentsJournal
SUBSCRIBE
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
  • Analysts Coverage
  • Truth In Data
  • Podcasts
  • Videos
  • Industry Opinions
  • News
  • Resources
No Result
View All Result
PaymentsJournal
No Result
View All Result

Swift Vs. Ripple: A Real Lesson For Blockchains That Want To Disrupt Entire Industries

Tim Sloane by Tim Sloane
February 8, 2019
in Analysts Coverage, Blockchain
0
Swift Vs. Ripple: A Real Lesson For Blockchains That Want To Disrupt Entire Industries

Swift Vs. Ripple: A Real Lesson For Blockchains That Want To Disrupt Entire Industries

4
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

This article in American Banker by Penny Crosman is the perfect lesson for every blockchain company that thinks it can restructure an industry. Industries are complex and exist for a reason. Every stakeholder adds value and cost. This article demonstrates that when you try to carve a stakeholder out of an industry you better be prepared for a fight:

“The international payments network Swift has a target painted on its back, and a number of upstarts are aiming for it. But a new technology it is experimenting with could be the shield Swift has been looking for.

One rival, Ripple CEO Brad Garlinghouse, is fond of referring to Swift as a horse and buggy and his own company’s distributed-ledger technology for cross-border payments as a race car. He has repeatedly said that Ripple will take business away from Swift: “What we’re doing and executing on a day-by-day basis is, in fact, taking over Swift,” he told Bloomberg recently.

But lately Swift, which once considered Ripple and other tech company rivals an existential threat, has struck a more confident tone. Swift says the progress it is making with so-called global payments innovation, or GPI — technology that lets banks see where their payments are at all times, and that comes with rules around response and confirmation times — will neutralize the competitive threat posed by Ripple and others. It says its bankers are happy with the speed and insight GPI gives them.

Moreover, Swift argues, distributed-ledger technology does not fix the delays in international payments that typically occur for two reasons. One, legal and regulatory requirements make the use of a shared ledger impossible among banks that lack mutual know-your-customer relationships. Second, banks are unwilling to let their rivals see how much money they have.

It is simply amazing how many blockchain companies Mercator meets that expect regulations will adapt to their vision. They even tell us how they have met with receptive regulators. They simply have no clue how long it takes to promulgate new regulations. That’s why Mercator looks for blockchain implementations that include a strong centralized management structure that will be responsible for contracts, rules, and technology deployment, as well as representation that can identify legal requirements in every legal domain, which can be many.

Penny wraps up this great article pointing out that the new partnership between Swift and R3 gives Swift an improved position is settlement and highlights the problem when a virtual currency is involved:

Manish Kohli, global head of payments and receivables at Citi and a supporter of GPI, agrees with that argument. He said he looks at five things in international payments: cost, speed, transparency, convenience and security. While originally the industry thought GPI would only provide transparency, he said now everyone agrees that it helps in all five areas.

“With GPI, we can see the charges banks have made along the way and how long they have taken to process a payment,” Kohli said. “Seeing how much each bank is deducting puts pressure on the ecosystem to reduce costs. If customers can see how long a bank is taking to move a payment, that forces banks to move toward faster processing or straight-through processing and speed up the time that it typically takes to send money across borders.”

“We’re strong believers in GPI,” he said.”

Why GPI

While Ripple says it has 200 companies using its software, Swift says 450 banks — which handle 80% of international payments — are using its GPI technology. More than $300 billion of payments is settled over GPI daily…

Read the full article here

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

Tags: BlockchainRippleSwift
4
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Analyst Coverage, Payments Data, and News Delivered Daily

    Sign up for the PaymentsJournal Newsletter to get exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    smart banking

    Smart(er) Banking Requires More Than Just Tech

    June 5, 2023
    Google Wallet Expands Features

    Google Wallet Continues to Bet on Digital with Expanded Features

    June 2, 2023
    digital value

    How Embracing Digital Value Can Help Solve the B2C Payments Conundrum

    June 1, 2023
    instant payments, real-time payments, RTP

    Banks Developing Instant Payments Products in the U.S. Should Focus on Billers to Generate New Revenue Streams  

    May 31, 2023
    Digital Wallet Use Delivers on Convenience and Security

    Digital Wallet Use Delivers on Convenience and Security

    May 30, 2023
    5 Ways to Protect Your Financial Institution from a Cyberattack

    5 Ways to Protect Your Financial Institution from a Cyberattack

    May 26, 2023
    traditional banks

    How Traditional Banks Can Modernize Without Risk

    May 25, 2023
    identity fraud

    Javelin’s Identity Fraud Study Highlights the Changing Nature of Fraud

    May 24, 2023

    Linkedin-in Twitter

    Advertise With Us | About Us | Terms of Use | Privacy Policy | Subscribe
    ©2023 PaymentsJournal.com

    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    Menu
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Videos
    • Industry Opinions
    • Recent News
    • Resources
    Menu
    • Industry Opinions
    • Recent News
    • Resources
    • Analysts Coverage
    • Truth In Data
    • Podcasts
    • Industry Opinions
    • Faster Payments
    • News
    • Jobs
    • Events
    No Result
    View All Result

      Register to download this complimentary report from Volante Technologies: