Cryptocurrency, Ripple [XRP]–In a move that could prove prescient for the merging landscape of blockchain and banking, the CEO of Ripple has thrown down the gauntlet against primary competitor SWIFT.
On November 13, Ripple Labs Inc. CEO Brad Garlinghouse told Bloomberg TV that his blockchain based company is able to gain customers at a fast rate relative to the market because financial firms are looking for faster, more modern technology than what is currently offered through entrenched fintech company SWIFT.
Ripple, the startup company behind the number three cryptocurrency by market capitalization XRP, has been one of the more disruptive crypto firms to enter the space of financial technology and the realm of banking. By focusing on payment services and cross-border money transfer, Ripple has managed to position itself as an action-oriented blockchain firm that has real potential to impact what has become a stagnant banking landscape.
At present, the primary opposition to Ripple in terms of gaining greater access to cross-border payment firms has been the Society for Worldwide Interbank Financial Telecommunication or SWIFT. Traditionally, SWIFT has controlled the lion’s share of cross-border payments and remittances by offering a secure and trustworthy platform for banks and customers to send money internationally. However, the limitations for the fintech dinosaur are mounting in the face of the innovation of cryptocurrency, with Ripple able to substantially cut down transfer times and fees to help the bottom line of new acquisitions. Already Ripple has been able to partner with two of the largest money transfer firms in the world, Moneygram and Western Union, for pilot programs to test the crypto-based technology in sending money abroad.
While banks may continue to look to SWIFT for their cross-border transactions, CEO Garlinghouse believes is company offers a substantial advantage that will become more apparent over time as cryptocurrency and blockchain grow mainstream. Already, Mexico based Cuallix has reported cost-savings and improved efficiency from operating with Ripple and the XRP currency for cross-border payments with the United States, an early-adopter endorsement that could pay dividends in attracting future customers.
As opposed to SWIFT and current methods of sending money internationally that require layers of bank protection to ensure the security of funds, Ripple relies upon blockchain technology which cuts out most of the costly intermediate players. However, even as the company grows in developing nations such as Brazil and India which are looking for cheap remittance services, SWIFT remains a goliath of a competitor, with the company reporting an 11,000 strong customer base and operations in over 200 countries and territories.
Regardless of the stranglehold, his competition has over the current market of cross-border payments, Garlinghouse remains optimistic that his company’s technology will prevail in the long run, and prove SWIFT and other current iterations obsolete,
“The technologies that banks use today that Swift developed decades ago really hasn’t evolved or kept up with the market…Swift said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.”
Garlinghouse further added,
“What we’re doing and executing on a day-by-day basis is, in fact, taking over Swift.”