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Blockchain’s emergence has been a threat to conventional companies that offer the services that blockchain seeks to make better and maybe eventually get them out of work. As is expected, blockchain, despite all the hype hasn’t really received much of a warm welcome in certain parts of the world. A rivalry is gradually building as one of the leading blockchain service offering companies, Ripple, has found it’s path intertwining with that of conventional interbank messaging service company Swift.

Ripple is a Californian start up that focuses on the new blockchain technology to offer cross border payment services at much faster speed than what is known now. It also is the creator of the Ripple (XRP) cryptocurrency.
Swift on the other hand has been in the business of offering inter-bank messaging services to several top class banks and financial institutions across the globe for the past 45 years. That’s a little beneath half a century, which should explain why it’s not going to sit back and watch some newbie just kick it out of business in the name of a new technology.

ripple and santander partnership

Back in April, Ripple teamed up with Spanish bank, Banco Santander, in the launching of a kind of blockchain based messaging system which allowed transfer of money across several countries that bank operated in, and in multiple currencies. The bank’s UK head of innovations, Ed Metzger, stated that it was part of the bank’s plans in a bid to improve customer service:

“There were some pain points experienced by our customers when making cross-border payments that we wanted to address with the new OnePay FX service,…We have had very positive feedback and good take-up. It gives the customer much more certainty over how much money will arrive in the destination account.”

Ripple has been busy these past few months signing on several money transfer agencies and financial institutions unto their platform to be their major cross border payment service provider, with their XCurrent package. As it stands reports have it that there are about one hundred of such partnerships.
Ripple’s senior veep, Asheesh Birla, has also stated that the firm is still partnering with more financial institutions to have them use the XCurrent.
Apparently Ripple’s business dealings haven’t really gone down well with Swift, as Ripple poses a direct competition to the company. The main advantage Ripple holds over Swift at the moment, is its use of blockchain. The blockchain network makes it’s possible for Ripple to conduct cross border payments within seconds, skipping several stages in the current transfer system used by Swift. The latter’s system usually takes a much longer time and is costly, as the transaction goes through a number of other banks before it reaches its destination.
Swift has since then been reportedly making amends to its transaction system to make its service better than it previously was according to its Head of banking, Harry Newman

“It is no secret that correspondent banking is a 1998 model and we are busy addressing that, bringing it to a 2018 model,…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 company has since then launched its GPI (Global Payments Innovation) which accounts for four of every ten transactions within its US-China transaction arena. It is reportedly being used by some 165 banks at the moment.
However adoption of blockchain doesn’t seem to be an option available to Swift presently as expressed in Mr. Newman’s own words

“It (blockchain technology) is not straightforward to scale and it is not yet appropriate to do so,…All the announcements [by banks about their blockchain payments projects] made to date, they are either in-house or bilateral projects between banks. As you bring scale you get escalating complexity.”

Maybe this is where Ripple may have the upper hand as the company claims to have identified scaling as an issue some three years ago and has already made provisions to cover for that according to senior vice-president Asheesh Birla.
The struggle between fintech start ups and conventional financial agencies is just beginning to take root, and as we have seen it with Ripple and Swift at the moment, we may as well be seeing it with more companies, as blockchain and cryptocurrency continue to ride the storm of the hype they have received so far.

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