SWIFT: Instant payment services face challenges from Ripple, Libra, etc.

SWIFT recently said that it is currently responding to the current challenge of providing instant payment services, and will adopt its new technology to plan to use its brand to reach communities outside the Swift network to maintain its leading position in global payments.

SWIFT, also known as the “Global Interbank Financial Telecommunication Association”, is an international cooperative organization between international banks. It was established in 1973 and currently employs SWIFT systems in more than 11,000 banks and institutions in most countries around the world. The purpose of SWIFT was to increase the settlement speed of international banks.

SWIFT Banking Director Harry Newman said that SWIFT and other traditional platforms face many challenges, especially from the controversial and unreleased Libra Stabilizers from Ripple, Stellar, IBM and Facebook. These new solutions are designed to reshape the way global currencies are circulated by reducing settlement time and increasing the transparency of trading systems based on blockchain to prevent loss and traceability.

In fact, SWIFT gip cross-border instant payment service has begun to be laid out a few years ago, but with the expansion of the new, blockchain-based cross-border instant payment solution market layout and exploration at the regulatory level, it is mainstream The financial sector is closely watching, so SWIFT's willingness to take the lead in the market and maintain its position in the payment field is even more urgent.

SWIFT has previously completed two cross-border real-time payment tests in Australia and Singapore in October last year and July this year, and its gpi is now able to achieve instant payments in Australia, Singapore and Europe. And from the September gpi review file provided by Swift, the proportion of payment services that can be completed in 5 minutes is 36%, nearly 50% of the payment can be completed within half an hour, and completed within 6-24 hours. The proportion is 21%. Basically, 96% of payment services can be completed within 24 hours.


According to China Financial Network, after completing the test on Singapore, SWIFT gpi and European banks will participate in the TARGET Instant Payment Settlement System (TIPS) test. At the same time, other markets that have realized domestic instantaneous payment will also be tested one after another, and the SWIFT gpi-based cross-border instant payment service will be officially launched during the year.

In an interview with a TV station in September, Harry Newman said that he was mainly working on launching SWIFT gpi instant.

SWIFT's cross-border payment system is not based on a blockchain, but instead uses an application programming interface (API) that allows financial institutions to access each other's data in order to verify bank accounts before payment, ie, institutions such as banks call through APIs at the trading point. SWIFT cross-border payments can be initiated, primarily by allowing financial institutions to share data between the parties, thereby reducing errors and delays on the network. He Aide, Managing Director of SWIFT Asia Pacific, once said: "The approach we have taken is that banks do not have to invest in new cross-border infrastructure, but only need to optimize SWIFT gpi and its connection to the domestic real-time payment system."

This shows that Swift is working with more organizations to become their instant payment service provider. From the current trend, although it is necessary to achieve more cross-border instant payment on a global scale, more participants need to cooperate, but for the instant payment service providers, they are stalking each other. For Swift, after real-time proof-of-concept and testing of local payments, it is up to the company to establish a partnership with enough organizations around the world to truly build on a global scale.

Harry Newman said: "We have multiple communities in Swift, but globally, not just Swift, there are now about 60 communities using instant payment services."

The cross-border payment process in the traditional financial sector is inefficient and cumbersome. In recent years, it has been impacted by other emerging multinational payment solution providers including Ripple, and the strong demand for instant payment is driving the transformation of the payment field. SWIFT pointed out in its official website that the world of cross-border payments is undergoing major changes, and customer expectations and fundamental changes in available technologies, coupled with the proliferation of new payment providers and infrastructure, have driven this shift.

As the earliest cross-border payment organization, SWIFT said that it will use new technology to further consolidate its leading position in the payment field, but there is no more details about the new technology. At the same time, competition from cross-border payment services based on blockchain technology is accelerating.

According to Ripple's official website, RippleNet has more than 200 customers providing cross-border processes, and Ripple has previously partnered with MoneyGram, the world's second largest remittance service company, to strengthen XRP in cross-border payment and foreign exchange settlement services. Circulation.

JPM Coin, which was previously launched by JPMorgan Chase, has clearly stated that it is mainly aimed at cross-border transactions of some institutional customer users and is not intended to be released to the public. Just last month, a number of banks, including Deutsche Bank and OCBC Bank, announced their participation in JPMorgan's blockchain network IIN. According to previous reports, IIN was launched as a pilot in 2017. It runs on a blockchain developed by JPMorgan Chase to reduce friction in the global payment process. John Hunter, head of global clearing at JPMorgan Chase, once said: "The purpose of IIN is always to build a meaningful banking user ecosystem, all of which aims to better solve complex cross-border payments with emerging technologies such as blockchain." .

Stellar, a blockchain-based cross-border payment platform, was founded by Ripple's co-founder Jed McCaleb and is one of Ripple's main competitors, according to Babbitt's September 17 report, hosted by the Wanxiang Blockchain Lab. At the 5th Global Summit of Blockchain, the Bank of Japan’s Office of Payment and Settlement System Counselor said in a speech that Stellar had completed the third phase of development in June this year, namely, simultaneous cross-border payment. The third phase focuses on the security of cross-border payments. In addition, IBM has previously launched Stellar's blockchain-based cross-border payment solution, the World Wire payment system, to achieve real-time international settlement between banks using cryptocurrency.

According to a report on September 11, MasterCard and R3 will jointly develop and test a new blockchain cross-border payment solution, initially focusing on linking global payment infrastructure, plans and support supported by the MasterCard Clearing and Settlement Network. bank.

In addition, Facebook's Libra project is currently facing huge regulatory resistance. On October 4th, US online payment giant PayPal announced its withdrawal from Facebook's digital currency Libra project, which was one of the first 28 founding members of the Libra committee. . Since then, there have been rumors that Libra's major financial partners, such as Visa and MasterCard, are rethinking whether to continue to participate in the project.

Immediately, Libra officially tweeted several tweets to create a modern, low-friction, highly secure payment network, empowering billions of people without financial services, a journey, not an end, like the Libra project. The journey to build an intergenerational payment network is not easy.

In addition to the challenges of cross-border instant payment solutions based on blockchain, SWIFT itself is exploring blockchain technology solutions. In January of this year, SWIFT announced a partnership with Ripple's competitor R3's blockchain platform, Corda, to launch a blockchain-based proof of concept (POC) gpi link test to implement GPI payments on a trading platform based on distributed ledger technology. In order to be able to ensure the speed and transparency of gpi payments. On the other hand, gpi is also able to work with the Digital Ledger Technology (DLT) community to open its gpi services to other DLT- and blockchain-based platforms in the future and integrate them into legacy systems. Although the prospects for cooperation are considerable, there is still a need for further proof-of-concept processes.