In 2019, SWIFT improved the speed for half of the gpi payments to an average of 30 minutes, with almost every transaction being completed in less than 24 hours. At the time, Ripple Labs dismissed this upgrade as “only a marginal improvement” over “very old architecture”.
SWIFT Go is the new product of the Society for Worldwide Interbank Financial Telecommunication, also known as SWIFT.
The service enables businesses and consumers to send low-value cross-border payments in seconds with full transparency and high security to anywhere in the world.
Seven global banks, which collectively process 33 million low-value cross-border payments per year, have already gone live with SWIFT Go, a key building block in the cooperative’s strategy to enable instant and seamless cross-border transactions.
SWIFT is strengthening as countless payment startups have come up with solutions that solve the toughest problems in cross-border payments, including blockchain companies like XRP-powered Ripple, Stellar (XLM) by ex-Ripple founder Jed McCaleb and Six leaf clovers with Algorand drive are new on the market.
Ripple’s XRP is losing competitive advantage: BIS and SWIFT go in real time
SWIFT’s new product is designed for SMEs who want to pay suppliers overseas and for consumers who send money to friends and family internationally.
Go uses stricter service level agreements between institutions and pre-validation of data to enable banks to offer their end customers a fast and predictable payment experience with upfront transparency about processing times and costs. The SWIFT network connects more than 11,000 institutions and 4 billion accounts in 200 countries worldwide.
Stephen Gilderdale, Chief Product Officer at SWIFT, said: “SWIFT Go is another step in realizing our vision of enabling anyone to send money instantly and securely around the world, from anywhere.
“The new service is a direct response to the needs of small businesses and consumers for fast, easy, predictable, secure and competitive cross-border payments. Our new service will enable banks to compete effectively in one of the fastest growing segments of the payments market and provide their customers with a seamless experience. “
SWIFT Go is tightening the service levels between banks in order to increase the speed. A single payment format increases direct processing, while services such as pre-validation eliminate friction that causes delays.
The sender knows in advance information about the amount, time, fees and exchange rate of a payment, and both sender and recipient can track the status in real time.
Processing fees are agreed in advance between the financial institutions so that they can offer their customers full transparency; increased straight-through processing further lowers processing costs. BBVA, Bank of New York Mellon, DNB, MYBank, Sberbank, Société Générale and UniCredit have all gone live with the solution.
Marjan Delatinne, who was head of global banking at Ripple prior to joining SETL earlier this year, said in 2019 that Ripple and Swift are not competitors but “can be very complementary”.
This was said at the Blockchain Summit in London. Ms. Delatinne previously worked for Swift for 10 years and was most recently responsible for sales of the global payment innovation service (gpi) before joining Ripple.
“We are two different things. We are not replacing Swift as Swift has its own value, ”she said, adding that banks“ could benefit from both ”.
The gpi is Swift’s attempt to provide faster turnaround times and a way to track payments. In 2019, Swift took an average of 30 minutes in the ETA for half of the gpi payments, almost all within 24 hours. That was a great achievement back then.
At the time, Ripple Labs dismissed this upgrade as “only a marginal improvement” over “very old architecture”. Ms. Delatine explained why Ripple and SWIFT are not competitors per se.
“Swift is dramatically improving payment processing today, but it’s still about messaging. You’re still sending a message to another participant. I don’t call it a settlement because this is not a settlement. The point is that I can send a message faster and follow it up. This is an improvement on before, where it could take days. “
However, SWIFT Go appears to have reduced low-value cross-border payments to seconds with full transparency and high security. This is quite an evolution for the company struggling to stay relevant.
However, Ripple remains bound by the lawsuit with the SEC over an alleged sale of unregistered securities, implying that XRP is a security.
The removal of former SEC Director of Corporation Finance, William Hinman, continues today. The lawsuit took a turn last week when two of the five SEC commissioners admitted in a public statement that there is no clarity in the digital asset space.
The “godsend” was later “rebuked” by the agency in response to a letter from the individual defendants Brad Galinghouse and Chris Larsen trying to dismiss them.
As cross-border payments become very competitive, Ripple has diversified the use cases for the XRP ledger. It recently announced that it would venture into asset tokenization. Tokenized assets have also been under the SEC’s radar lately.
“Make no mistake: it doesn’t matter whether it’s a stock token, a securities-backed value token, or any other virtual product that offers synthetic exposure to underlying securities,” said SEC chairman Gary Gensler.