Financial settlement start-up Ripple has enjoyed a cordial, but at times uneasy relationship with the financial messaging network SWIFT. On the one hand it has sought to collaborate with SWIFT to try and improve the cross-border payments experience for corporate customers, but on the other hand its payment solution, which uses distributed ledger technology to reduce the time it takes to settle cross-border payments, competes with the financial messaging network’s Global Payments Innovation Initiative. SWIFT recently announced the successful completion of the first phase of its GPII pilot using a different technology than Ripple’s, clearing the way for a broader rollout in early 2017.
“GPII boasts settlement within a single day,” Ripple stated in a company blog post. “Same-day is an improvement, but we don’t believe it will keep up with consumers’ and businesses’ expectations for on-demand payments.”
A July transaction between ReiseBank and ATB Financial using Ripple’s distributed-ledger protocol took just eight seconds to settle a CAD$1,000 ($750) transfer, the first real international blockchain payment to be sent between Germany and Canada.
Michel Jacobs, executive vice president and head of new market strategy at the payments technology company iGTB, compares current developments with the early days of smartphones when channels were limited and their adoption and usage was limited. Fast forward to today: Networks and uptake are plentiful thanks to sharp competition and open markets.
“Today we are at the dawn of a similar evolution in global-payment movement networks and operators,” Jacobs says. “The ability that traditional operators have to evolve and drive innovation, versus the ability of new entrants to mature and evolve—all within agreed-upon rules between participating banks—is what will define the landscape, in the near future.”
The future of payments, iGTB believes, will be Cloud-based and fine-tuned—it will be about understanding each interaction, enabling banks to optimize and maximize the execution of those transactions based on a deep understanding of the intent and context of the interaction. “In short,” Jacobs says, “payments will become business-aware.”