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Ripple highlighted a new report published by the guardian which is based on a series of delays and errors that the traditional SWIFT global payments network has become accustomed to.
According to Ripple's global strategic account leader, Marcus Treacher said the Guardian article is a stark reminder of the importance of cryptography, blockchain and digital resources like Ripple.
It's a reminder of why Ripple's mission to revolutionize the global financial payments system is so important.
Timely reminder of why our Ripple mission is so important. Building the #IoV for super-fast, transparent and reliable payments all over the world https://t.co/TZ3iOVOaks
– Marcus Treacher (@marcus_treacher) December 9, 2018
Delays and errors in SWIFT
The Guardian article traces 4 stories of people and charities that deal with the inconsistencies, errors and delays of the SWIFT cross-border banking system. It describes the problems of our current cross-border payment system, stating that the acronym SWIFT (Society of Worldwide Interbank Financial Telecommunications) has often "proved to be an improper term".
The first story that exclaims SWIFT's misadventures is about a charity that uses the SWIFT cross-border remittance service for payment to Zambian schools:
The charity of Elaine and Malcolm Thompson, St Paul's Children's Project, pays tuition and expenses for 36 orphans in Zambia. In October they made a payment using the Swift system of £ 11,000 from the Barclays account of the charity designated to the designated bank in Zambia, but it never arrived.
The case above reported that an "observer" intervened and returned the money to charity. The Barclays Bank which facilitated the payment accused the beneficiary bank in Zambia for delays.
The next story is more personal in which a family member has lost money in a SWIFT transfer to his mother-in-law:
Martin Finnegan was told that the £ 2,450 sent from his national account to his mother-in-law in Russia would take about three days. Three months later he was still in transit, an unknown place.
Another story, this time with a considerable amount of money on the line, comes from a woman who moves to Canada with a deposit of £ 54,000 for her new home:
In June, Jane Collins nearly lost the home she was buying after moving to Canada because the 54,000 pound deposit transferred from her national account disappeared. In the end he arrived six weeks later. Nationwide has accused the bad communications along the chain of banks.
The final story treated by the Guardian was about a woman who waited 5 months for her payment to reach a tour operator for a holiday she was taking:
Laura Fulcher has waited five months for a £ 500 holiday deposit to reach her Ghanaian tour operator. He was eventually repaid after the Observer contacted his bank, TSB. He also reimbursed the associated expenses and added interest and £ 50 in compensation for the "inconvenience".
SWIFT – A payment system with defects
As can be seen from the aforementioned stories, the SWIFT cross-border money transfer system is far from being perfect with its fair share of defects. For a system that is used on a global scale every day these types of problems should be non-existent.
Considering the fact that the SWIFT system is a 45-year secure messaging service that relies on its 11,000 members and manual input to transfer funds, it's no wonder the system is slow and imperfect.
The Ripple team understands that the current cross-border remittance system SWIFT needs a complete overhaul in today's data-driven technology society. That's why Ripple is building a global payments network (Ripple Net) and other payment services based on blockchain technology.
Have you had problems with cross-border payments via SWIFT? Let us know in the comments section below.
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