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Cryptocurrency, ripple [XRP]-In a move that could prove prescient for the blending landscape of blockchain and banking, Ripple's CEO threw the gauntlet against the major SWIFT competitor.
On November 13th, the managing director of Ripple Labs Inc., Brad Garlinghouse say Bloomberg TV that its blockchain-based company is able to win customers at high rates compared to the market because financial companies are looking for a technology faster and more modern than the one currently offered by the established company of fintech SWIFT.
Ripple, the startup company behind the cryptocurrency number three by market capitalization XRP, was one of the most disruptive encryption companies to enter the space of financial technology and the realm of banking. Focusing on payment services and cross-border money transfers, Ripple has managed to position itself as an action-oriented blockchain company that has a real potential for impact on what has become a stagnant banking landscape.
At the moment, the main opposition to Ripple in terms of greater access to cross-border payment companies was the Global Interbank Financial Telecommunications Company or SWIFT. Traditionally, SWIFT has controlled the lion's share of cross-border payments and remittances by providing a safe and reliable platform for banks and customers to send money internationally. However, the limits for the fintech dinosaur are increasing in the face of cryptocurrency innovation, with Ripple substantially reducing transfer times and rates to help the bottom line of new acquisitions. Ripple has already been able to partner with two of the world's largest money transfer companies, Moneygram and Western Union, for pilot programs to test cryptography-based technology in sending money abroad.
While banks can continue to look to SWIFT for their cross-border transactions, CEO Garlinghouse believes that the company offers a substantial advantage that will become more apparent over time when cryptocurrency and blockchain will become mainstream. Already, Cuallix based in Mexico reported cost savings and greater efficiency from working with Ripple and the XRP currency for cross-border payments with the United States, an early approval that could pay dividends to attract future customers.
Unlike SWIFT and the current methods of sending money internationally that require levels of bank protection to ensure the security of funds, Ripple relies on blockchain technology that eliminates most of the expensive intermediate players. However, even though the company grows in developing nations like Brazil and India who are looking for cheap remittance services, SWIFT remains a competitor's goliath, with the company reporting a clientele of 11,000 customers and operations in over 200 countries and territories.
Regardless of the grip, its competition has on the current cross-border payment market, Garlinghouse remains optimistic that its company's technology will prevail over the long term and will demonstrate that SWIFT and other current iterations are outdated,
"The technologies that banks use today that Swift has developed decades ago have not evolved or kept pace with the market … Swift said that not so long ago they did not see blockchain as a solution for the corresponding banking system. 100 of their customers claiming that they are not in agreement. "
Garlinghouse also added,
"What we are doing and performing on a daily basis is, indeed, taking control of Swift."
