SWIFT, a global network for cross-border payments is confident that its global payments innovation (GPI) system is outperforming Ripple. According to SWIFT, GPI allows banks to monitor and track payments. These financial institutions can also stop and recall a payment if an error or fraud is detected.
Ripple and SWIFT, Largest Contenders in Cross-border Payments
Ripple and SWIFT are the largest contenders when it comes to cross border payments. Each has made comments in the past, outlining that its platform is better than the other. For instance, Brad Garlinghouse, Ripple’s CEO once stated that “what we’re doing and executing on a day-by-day basis is, in fact, taking over Swift.”
However, SWIFT has a comeback to that statement and that is with its GPI payment tracker. The GPI is reportedly used by 450 banks and it has recorded a daily settlement volume of $300 billion. It also accounts for 50 percent of transactions completed within 30 minutes and 40 percent of those that were credited within 5 minutes.
SWIFT Offers Transparency, Speed, Security and Convenience
On the other hand, Manish Kohli, global head of payments and receivables at Citi outlined that five features are of importance to him when it comes to international payments. These are cost, transparency, speed, security, and convenience, which the GPI has offered. He adds that this goes contrary to the industry’s expectation that only transparency will be covered upon the system’s launch.
Kohli also noted that the GPI makes it possible for banks to track payments as they move along the chain. In this case, details such as charges levied by other banks and the time taken to process the payment are visible. Therefore, this only helps to speed up the transaction process since a financial institution will be conscious of the fact that they are being monitored by their customer.
GPI Offers a Stop and Recall Payment Feature
Another feature of the GPI noted by the global payments platform is the ability to Stop and Recall Payments. Here, a sending bank can decide to stop a payment that is in progress if an error or fraud is detected. In the past, financial institutions had to contact intermediate banks which the money has passed through in order to retract it.
Asides pointing out the capabilities of the GPI, SWIFT outlined that banks are not willing to adopt blockchain because it has legal and regulatory requirements such as a Know-Your-Customer (KYC) relationships. They also pointed out that these financial institutions are not ready to allow their competitors to know how much they have.
SWIFT also stated that they are yet to see how the distributed ledger technology will help in improving the services they render to their customers. They attributed this to the fact that an experiment had been conducted in 2018 with 40 member banks using the blockchain. However, the latter did not bring about transparency.
