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SWIFT GPI vs Ripple Payments

Can SWIFT GPI act as a saviour to correspondent banking which is facing extinction due to disruptive Blockchain payments- RippleNet? Both systems have its pros and cons. It is up to financial institutions /corporates to adapt to new payment standards which offers convenient, hassle free and transparent payment processing standards.

While SWIFT GPI tries to eliminate inherent faults in correspondent banking and is an attempt to revamp the same based on old standards, Ripple offers disruptive payment processing within a closed user network. SWIFT still holds the advantage of being the largest network for payment processing with more than 11,000 banks in its network. SWIFT GPI is a quantum leap to improve speed, security and transparency issues in payment processing standards which is now being used by 165 member banks.

The three key features of SWIFT GPI are GPI tracker, GPI observer and GPI directory. SWIFT GPI tracker provides end-to-end tracking of payments being processed. This is achieved by means of incorporating unique end-to-end tracking reference[UETR] in GPI payments. SWIFT has mandated member banks to incorporate UETR as part of SR 2018 guidelines. GPI observer monitors GPI member’s adherence to new SLA rulebook to enhance cross border payments. GPI directory provides a complete list of GPI member banks and enables corporates/financial institutions to apply apt payment routing methods. SWIFT GPI also relies upon improving market infrastructures to achieve interoperability between domestic and cross border payments. 

Corporate treasures can take advantage of SWIFT GPI tracker as this provides visibility of receipts and inwards. However, these new standards still rely on old infrastructure and not as disruptive as payments based on Blockchain technology. SWIFT, the incumbent is also trying its innovation in Blockchain space -  but being a little skeptical about the scalability of the framework.

Ripple on the other hand is based on disruptive distributed ledger technology[DLT] standards and has further enhanced the framework using ILP [InterLedger Protocol] to address interoperability and scalability issues. Ripple Product Suite consists of various payment processing technologies -  RippleNet, xCurrent, ILP, xRapid and xVia. These technologies offer revolutionary standards in payment processing standards on speed, tracking, scalability and liquidity, thereby emerging as main competitor to SWIFT’s monopoly. Ripple offers payment processing standards which confirms payment finality within seconds whereas SWIFT GPI promises payments within 30 minutes or within 24 -hour time frame.

Ripple payments as with any disruptive technology face resistance in adoption of this technology and few banks have adopted this. However, the recent developments in global payments indicates that SWIFT and Ripple can effectively contribute to payment processing standards on a collaborative mode.  Banco Santander which has previously launched Ripple powered payment application OnePayFX has gone live with SWIFT GPI for cross-border payments.  Ripple is one of the exhibitioners for the proposed SIBOS 2018, contrast to the fact that Ripple launched SWELL as a counter event for SIBOS in 2016.

The fact which can be inferred from these developments is that global payments space is poised to witness disruptive changes – Ripple has forced SWIFT to improve payment processing standards - which has previously been ignored and taken for granted. This is good news for major corporates who has suffered from inefficacies of the system.  SWIFT GPI and Ripple payments - are advances in payment processing space trying to address age old issues using different approaches. Corporates/ financial institutions can adopt these technological advances which will suit specific requirements in payment processing.

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