Cryptocurrency

SWIFT And the Future of Cross Border Payment

Swift

For over 40 years, SWIFT financial messaging provider has supported the vast majority of cross – border B2B payments handled by banks. However, banks are now facing pressure to improve cross – border payments, often seen by customers as expensive, slow and opaque. Recently the global messaging system for cross borders, announced its intention at a proof – of – concept stage to link R3’s open – source blockchain solution.

Swift Asia Pacific Managing Director Lisa O’Connor said in a new interview with CNBC’s Crypto Trader that some members use DLT in their infrastructure, but Swift doesn’t plan to use the Tech to settle bank – for – bank transfers directly.

Works are being carried out from the perspective of the market infrastructure. This is what our stakeholders look at. We would be very open to working with DLT platforms that look at it. But we don’t have to do things like multilateral netting ourselves in the market, to clear transactions. This is not what Swift is doing. We are a platform at our core, and we are a place where we can potentially connect with those infrastructures.  I think it’s really interesting, and it’s all going on in DLT payment space.

SWIFT announced the Global Payment Innovation (GPI) initiative in response to the growing threat posed for Californian Ripple’s Fintech startup to drastically improve client experience through increased speed, transparency, and predictability in cross – border payments. At that time GPI was said to enable companies to receive an improvement.

SWIFT cross – border payments, though, are generally considered slow and often take days to complete via the appropriate banking system. According to a 2016 McKinsey and Co. report, Rethinking correspondent banking finds it difficult to track progress and to determine whether the money has been paid and payments often require manual intervention by banks.

However, Swift, who once saw the existential threat to Ripple and other technology company, was more reliable. Swift says the progress it is making with so-called global payment innovation, or GPI — a technology that allows banks to see where their payments are at all times, and that comes with rules on response and confirmation times — will neutralize Ripple and others ‘ competitive threat. Swift says the progress it is making with so-called global payment innovation, or GPI — a technology that allows banks to see where their payments are at all times, and that comes with rules on response and confirmation times — will neutralize Ripple and others ‘ competitive threat.

In addition, Swift argues that technology distributed does not fix international payment delays, which typically occur for two reasons. Legal and regulatory conditions make it impossible for banks lacking mutual know-how with their customers to use the shared ledger. Legal and regulatory conditions make it impossible for banks lacking mutual know-how with their customers to use the shared ledger.

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