Ripple has been taken to task for erroneously claiming that six percent of all financial transactions sent over the Swift network fail and require human intervention.
Ripple is not averse to a bit of Swift bashing, positioning its own blockchain-based funds transfer model as a more modern and effective alternative to the messaging network operated by the Brussels-based banking co-operative.
In a paper produced for the London School of Economics, banking consultant Martin Walker questions the repeated claims by Ripple executives of a six percent failure rate for Swift messages.
Ripple bases its allegation on a paper published in 2014 by the Swift Institute but authored by two independent payments experts, Kimmo Soramäki and Samantha Cook. However the error rate projected in the model created by the authors referred to the accuracy of the model not the rate of errors in messages.
"In other words, the 'six per cent error rate' was totally irrelevant," points out Walker. "All of Ripple’s commentary on the error rate and what it meant was also, as a consequence, completely erroneous."
While there is 100 per cent guaranteed delivery of messages on the Swift network, Swift's gpi Tracker, which collects data about delays and errors across the interbank network, suggests that delays in payments are typically caused by incorrect data inputs at the bank back-end, and external regulations relating to sanctions screening and foreign exchange controls.
As Walker observes: "Simply changing the mechanism by which banks exchange instructions does nothing to fix any of these problems."
Walker concludes with a poke about the paucity of corresponding information from Ripple about its own performance rates.
"The transparency Swift provides about its network in general is a marked contrast to many fintechs," he writes. "It is probably worth noting that Ripple Labs had never released basic data about their business and network. There is no clarity regarding the number of active, paying customers, nor whether they make a profit from providing payments software. There is not even any public data about the total number or value of transactions processed for banks, the volumes they process using the XRP cryptocurrency or even the number of errors."