Swift struggles with Ripple's success

06 Jun, 2018
by Joeri Cant
News
Swift struggles with Ripple's success

Ripple is quickly making a name for itself, by promising to make payments faster, cheaper and more reliable using blockchain and cryptocurrency technologies. A rivalry between Ripple and Swift is raging in the world of cross-border transactions.

According to the Financial Times, Swift has responded to the threat by improving the efficiency of its own messaging system and carrying out its own tests on the potential of blockchain technology.

“It is no secret that correspondent banking is a 1998 model and we are busy addressing that, bringing it to a 2018 model,” says Harry Newman, head of banking at Swift. “But in terms of speed, what problems are you trying to fix? We have our own cloud and API solutions and are already doing payments in minutes or even seconds.”

The rise of Ripple and similar blockchain-based payment companies represent a direct challenge to the longstanding dominance of Swift, a non-profit company based near Brussels, Belgium.

In past communications Swift has found it hard to hide its scepticism.

“Blockchain technology is not straightforward to scale and it is not yet appropriate to do so,” Mr Newman said. “All the announcements made to date, they are either in-house or bilateral projects between banks. As you bring scale you get escalating complexity.”

“Currently cryptocurrencies are just not fit for purpose — they go up and down too much.”

It seems evident that Ripple holds all of the cards right now. Ripple has a first-mover advantage and Swift seems to remain skeptical regarding the potential of distributed ledgers.

It might well be that this “attitude’ will be the difference between remaining a market leader and becoming absolete.

Time will tell.

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Read more about: Ripple (XRP)

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