By
Chimamanda U. Martha
November 23rd, 2023
Despite the growing crypto space, SWIFT is not going to lean back: it reduces cross-border payment times providing its clients with fast and safe services.
SWIFT is a service that at a first glance doesn’t correspond to a modern FinTech environment. It was born more than 40 years ago and obviously has already gained its strong positions, nevertheless, now it has some serious rivals from the crypto world. And Ripple is among them.
With a view to find an adequate answer to this growing competition, SWIFT has launched its global payments innovation (gpi) for banks’ corporate clients that is said to be faster than its existing system and includes delivery-style tracking tools.
It is reported that $100 billion payments are sent per day via gpi, and more than 150 financial firms around the world are using this tool. Hundreds of thousands of payments, which is nearly 10% of SWIFT’s cross-border payments traffic, are being carried out daily across 220 international payment corridors.
The company is constantly working on reducing the time needed for sending cross-border payments. Currently, nearly 50% of SWIFT gpi payments are received by end beneficiaries within 30 minutes, and almost 100% of them – within 24 hours. Those exceptions that need more time to be carried out usually include more complex foreign exchange conversions, compliance checks or regulatory authorisations.
SWIFT gpi enables companies to obtain an enhanced payments service from their banks, having such key features as: same day use of funds within the time zone of the receiving gpi member; transparent fees; end-to-end payments tracking; full transaction information.
As Harry Newman, Head of Banking, SWIFT, says, “Thanks to SWIFT gpi, banks are able to credit payments within minutes and even seconds, while their customers are facing shorter supply cycles and able to ship goods faster. This is a very significant step forward for banks and for their customers”.
According to his words, adoption of SWIFT gpi is expected to grow very significantly. “Instead of focusing on a limited number of bilateral routes which has limited value both for banks and their customers, gpi already offers very extensive coverage across banks, markets and geographies”, added Harry Newman.
Despite its success, SWIFT is often criticized for not incorporating blockchain technology into the payments service, especially now, when blockchain is conquering the world. One of the most promising rivals for SWIFT is Ripple that is continuously getting new members and testing its blockchain systems with institutions all over the globe.
The company is a major holder of XRP, a crypto token which is traded at $0.91 at the press-time according to the data of Coinmarketcap. Though some investors are hoping that banks will use XRP to transfer money, which will make the token more valuable, it isn’t necessary to use XRP for some of Ripple’s systems.
For example, RippleNet, which is similar to Swift, has more than 100 companies-members and also enables users to transfer funds. It is said that Swedish bank SEB has sent $920 million via RippleNet from Sweden to the US.
Feeling the growing competition with SWIFT that is adopted in more than 200 countries, Ripple is working on enhancing its services and expanding its geography. Recently, it has announced its partnership with IndusInd Bank. Due this collaboration, Ripple will be able to get instant access in emerging markets such as India, Brazil, and China.