Ripple Labs to succeed SWIFT in cross-border payments space?

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Daniel Webber
Daniel Webber
Founder & CEO
Daniel is Founder and CEO at FXcompared and has numerous years of experience in the international finance world, especially within the media, technology and property sectors. Daniel is passionate… Read more
  • Succession, not integration is Ripple’s ultimate goal with SWIFT
  • More customers and finance companies are exploring xRapid to improve international payments
  • SWIFT and Ripple both dismiss rumours of an integration


Blockchain tech startup Ripple Labs, which recently entered the cross border payments space for people who want to transfer money internationally using its xRapid system, has re-stoked speculation about its relationship with the increasingly antiquated SWIFT system after its CEO, Brad Garlinghouse, claimed that blockchain technology is poised to overtake the latter.

In an interview for Bloomberg, Garlinghouse said that Ripple Labs, whose digital alt-coin is frequently used as a proxy for other cryptocurrency payments, is fast attracting new customers because rising numbers of financial businesses are seeking faster, more contemporary technology than the decades-old SWIFT banking network.

SWIFT, which was created in 1972, stands for the “Society for Worldwide Interbank Financial Telecommunications”. Based near Brussels, it currently boasts 11,000 customers in the corporate sector as well as capital markets in more than 200 countries. It has been used by banks, individuals and commercial companies to transfer money internationally for nearly half a century. However, in the age of digital transformation, it’s showing its age: it’s comparatively slow, and it’s comparatively expensive.

By contrast, Blockchain technology is neither. Effectively a decentralised ledger, it does not require money to be processed through accounts at a central authority. Today’s financial firms are taking a keener and keener interest in it as it promises to solve the logistical problems of aging software systems.

Founded 40 years after SWIFT in 2012, Ripple deploys its XRP cryptocurrency as a proxy for individuals and businesses seeking to convert fiat currencies, obviating the need for cost-inflating money exchange brokers. As it guarantees liquidity for all payments, it has attracted partnerships with a range of institutional finance businesses, including giants like American Express and Standard Chartered.

During his Bloomberg interview, Mr Garlinghouse said: “The technologies that banks use today that Swift developed decades ago really hasn’t evolved or kept up with the market.

“Swift said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.”

In September, investment bank colossus JP Morgan unveiled plans to extend its blockchain payments tech to a network including over 75 different banks, among them huge European-headquartered names like Santander and Société Générale.

The fact is that the big banks are exploring the technology thoroughly as a means of making cross border payments more reliable and faster. This is no minor feat. To transfer money internationally, not only must they ensure accurate overseas transfer rates, they also have to comply with incredibly complex international compliance checks and contend with missing data that can on occasions hold transactions up for weeks. With blockchain, digital money can be transferred accurately and efficiently within seconds.

Ripple Labs currently has over 100 banks and payment providers on its RippleNet network, boasting names such as Japan’s Mitsubishi UFJ Financial Group and Standard Chartered Plc.

Rumours surfacing at the Sibos conference last month that a tie-up between SWIFT and Ripple was in the offing were scotched by SWIFT last week, and by Mr Garlinghouse during his Bloomberg interview. He said: “What we’re doing and executing on a day-by-day basis is, in fact, taking over Swift.”

Evidently, he’s not aiming for integration but for succession.

If you’ve enjoyed reading about Ripple, you may like to read our recent article here.

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