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Ripple has been the torchbearer of cryptocurrency-related payment solutions using the XRP digital asset. With Ripple expanding its reach globally and connecting niche countries, it has gained more and more prominence with each passing year. Interestingly, it would now appear that Ripple’s growing reach has intimidated existing solution providers like SWIFT. Indeed, according to one executive, SWIFT has been forced to rethink its strategy, thanks to the likes of Visa and Ripple.
Jürgen Marstatt, head of SWIFT Germany, noted in a recent interview that the company has introduced a new strategy that has placed greater emphasis on commercial transactions at the heart of its offering. According to Marstatt,
“In the future, we will no longer just send the message A to B, but rather add additional services. To this end, we have already launched a number of initiatives in recent years, such as the screening of sanctions or the acceleration of cross-border payments through our GPI project. We now want to standardize and integrate these individual components on a single platform. “
This strategy should encourage smooth and fast transactions in a consistent and transparent manner. This is something that its competitor, Ripple, has also done since the beginning. Ripple has partnered with numerous banks around the world to facilitate cross-border payments and other solutions, developments that have been challenging for SWIFT as the company now has to work on better and newer offerings.
While SWIFT is trying to rise to the challenge posed by Fintech companies like Ripple and Visa, the arguments in support of Ripple’s replacement are stronger than ever. Indeed, just recently, Ripple co-founder Chris Larsen noted that XRP can be a replacement for an inefficient system like SWIFT, one that takes “days to shift value” and carries “huge failure rates”. Larsen also said,
“… there was this key component of cross-border payments that was fundamentally discontinued because they depended on a system built in the 1970s: SWIFT and this asynchronous Swift correspondence banking system, which is just a nightmare.”
All in all, it would appear that SWIFT is finally acknowledging its problems, each of which it will have to solve by expanding its services as well, to stand a chance against the likes of Ripple.
