Ripple vs. SWIFT: The Battle for Global Payment Dominance

Cross-border
payments
or
international
payments
are
essential
for
global
trade,
investment
and
remittances.
SWIFT
has
been
one
of
the
dominant
players
in
the
global
payment
landscape
for
many
years.
The
Society
for
Worldwide
Interbank
Financial
Telecommunication
introduced
innovation
into
the
international
payments
sector
to
fight
against
challenges
with
traditional
methods
for
cross-border
payments. 

The
Ripple
vs.
Swift
debate
has
gained
momentum
in
recent
times
with

blockchain
technology
bringing
in
new
alternatives
like

Ripple
for
improving
cross-border
payments.
You
must
know
that
Ripple
has
emerged
as
a
formidable
contender
of
Swift
for
global
payment
dominance.
Let
us
compare
Ripple
with
Swift
to
find
out
whether
it
is
a
worthy
contender
or
just
another

blockchain
protocol.

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Introduction
to
Swift
as
a
Leader
in
Global
Payments

Before
you
compare
Ripple
with
Swift,
it
is
important
to
have
a
basic
idea
of
what
they
are.
Swift
is
a
communication
system
tailored
to
help
banks
with
cross-border
transactions.
Prior
to
the
introduction
of
Swift,
cross-border
payments
had
to
depend
on
manual
processes
and
telex
machines
that
slowed
down
transactions
and
increased
the
cost.
Swift
offered
a
reliable
network
that
can
enable
secure
communication
between
different
banks
all
over
the
world. 

People
are
likely
to
raise
doubts
over
questions
like
‘Will
Ripple
XRP
replace
SWIFT?’
because
Swift
has
developed
a
huge
network
over
the
years.
The
network
started
with
around
239
banks
and
has
expanded
as
one
of
the
biggest
financial
networks.
It
operates
in
over
200
countries
and
territories
with
an
impressive
scale
that
connects
more
than
11,000
financial
institutions
worldwide.

The
notable
financial
institutions
in
the
Swift
network
include
clearing
houses,
asset
management
firms,
securities
brokers,
corporate
clients
and
banks.
Swift
also
has
leading
global
institutions
as
its
members
thereby
implying
that
it
manages
a
huge
share
of
international
financial
transactions.
As
a
popular
standard
for
cross-border
financial
communications,
Swift
is
a
leader
in
global
payments.

Unraveling
the
Special
Highlights
in
Working
of
Swift

One
of
the
common
assumptions
about
the
working
mechanism
of
Swift
is
that
it
helps
in
transferring
money
between
banks.
It
is
important
to
know
that
Swift
is
a
huge
messaging
network
for
financial
institutions
all
over
the
world.
The
most
important
aspect
in
a
Swift
vs.
Ripple
comparison
is
the
fact
that
Swift
only
transfers
secure
messages
between
banks
and
financial
institutions.
Let
us
assume
that
a
customer
submits
a
request
for
an
international
money
transfer
to
their
bank.
The
customer’s
bank
will
initiate
a
SWIFT
message
featuring
codes
that
only
banks
will
understand
and
ensure
faster
transaction
settlement.
The
message
includes
details
about
the
sender,
amount
of
money
being
sent,
reason
and
currency.

During
the
journey
to
the
recipient
bank,
the
SWIFT
message
will
move
through
different
intermediary
banks
when
the
sending
and
receiving
banks
don’t
have
direct
relationship.
The
intermediary
banks
process
the
message
and
deduct
their
handling
fees
before
moving
the
remaining
balance
to
the
next
bank.
The
process
will
continue
until
the
message
or
the
funds
reach
the
recipient
bank.            

You
can
notice
that
SWIFT
depends
a
lot
on
the
network
of
correspondent
banks
spread
throughout
the
world.
The
network
obviously
provides
broader
global
coverage
albeit
with
problems
such
as
additional
costs
and
delays.
The
complete
process
for
cross-border
fund
transfer
with
Swift
may
take
one
to
five
business
days.
It
is
important
to
consider
the
processing
efficiency
of
intermediary
banks
and
the
number
of
intermediary
banks
involved
to
determine
the
speed
of
transaction
settlement
with
Swift.

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Role
of
Ripple
as
a
Challenger
against
Swift
in
Global
Payments

Ripple
might
have
been
another
blockchain
protocol
along
the
lines
of

Ethereum
with
generic
features.
On
the
contrary,
the
creators

Ripple
XRP
had
tailored
it
to
serve
efficient
cross-border
money
transfers.
The
relationship
between
Ripple
and
Swift
is
visible
in
their
primary
goals
that
revolve
around
streamlining
international
payments.
Ripple
aims
to
elevate
the
efficiency
of
global
payments
by
ensuring
that
they
are
cheaper,
faster
and
more
efficient.
The
XRP
Ledger
resolves
the
notable
concerns
of
cost
and
speed
in
cross-border
transactions
that
are
noted
in
traditional
systems
like
Swift.

Ripple
Labs
has
been
successful
in
its
efforts
to
revolutionize
global
payments.
It
has
collaborated
with
some
of
the
top
banks
and
financial
institutions
to
bridge
the
gap
between
blockchain
and
traditional
finance.
Some
of
the
notable
institutions
that
have
collaborated
with
Ripple
include
American
Express
and
Santander. 

Ripple
has
everything
required
to
challenge
Swift
as
it
not
only
focuses
on
international
payments
but
also
on
other
subdomains
in
finance.
It
can
help
in
ensuring
faster
payments
in
trade
finance
that
will
help
exporters
and
importers
with
faster
transaction
settlement
at
lower
costs.
The
scope
for
CBDC
development
with
Ripple
blockchain
makes
it
a
popular
choice
for
transforming
digital
payments. 

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Exploring
the
Magic
behind
the
Performance
of
Ripple

The
first
thing
that
comes
to
mind
when
you
hear
about
Ripple
is
blockchain
technology.
As
a
matter
of
fact,
the
biggest
difference
between
Swift
and
Ripple
is
blockchain
technology.
Ripple
blockchain
enable
direct
cross-border
payments
rather
than
relying
on
involvement
of
multiple
intermediary
banks.
The
two
most
important
components
in
the
working
of
Ripple
are
the
XRP
Ledger
and
XRP
token.
The
XRP
Ledger
is
the
decentralized
blockchain
network
of
Ripple
while
XRP
token
is
the
native

cryptocurrency
of
XRP
Ledger.
XRP
token
stands
out
as
a
promising
instrument
for
cross-border
payments
as
it
can
serve
as
bridge
between
fiat
currencies.

Ripple
uses
a
network
of
validators
for
confirming
transactions
alongside
ensuring
integrity
and
security
of
the
system.
Ripple
does
not
depend
on
mining
thereby
ensuring
faster
transaction
settlement
and
more
sustainability.
Cross-border
payments
are
more
efficient
on
Ripple
blockchain
as
the
algorithm
finds
the
most
effective
path
for
payment
transfer.
The
path
could
involve
currency
exchanges
through
liquidity
providers
or
direct
transfer
between
member
institutions
in
the
Ripple
network. 

Liquidity
providers
for
Ripple
include
specialized
crypto
trading
firms
and
banks
that
ensure
seamless
conversion
of

fiat
currencies
when
required.
One
of
the
notable
features
of
the
Ripple
with
respect
to
global
payments
is
the
flexibility
to
use
XRP
token
as
a
bridge
currency.
The
unique
feature
supports
the
faster
and
cost-effective
conversion
of
currencies,
which
reduces
the
complexity
of
international
payments.

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Comparative
Analysis
of
Differences
between
Swift
and
Ripple

The
introduction
to
Swift
and
the
XRP
Ledger
provide
a
clear
impression
of
their
distinctive
capabilities
that
can
improve
international
payments.
You
must
also
review
the
two
competitors
for
dominance
over
global
payments
by
evaluating
them
in
terms
of
different
parameters.
The
following
pointers
can
help
you
draw
the
line
between
Ripple
blockchain
and
Swift
messaging
protocol
for
global
payments. 

• 
  Speed
  of
  Transaction
  Settlement 

The
first
thing
in
any
Ripple
vs.
Swift
comparison
is
the
speed
and
efficiency
of
international
transfers.
Swift
is
a
messaging
protocol
and
involves
multiple
intermediary
banks
in
the
process.
The
complex
process
followed
by
Swift
for
international
payments
is
slower
and
is
also
affected
by
many
other
factors.
The
international
transactions
facilitated
through
Swift
may
take
one
to
five
business
days
for
settlement.
Some
of
the
other
factors
that
affect
the
speed
of
Swift
transactions
include
exchange
rate
policies
of
banks,
value
of
payment
and
impact
of
regulations.

On
the
other
side
of
the
battle,
Ripple
blockchain
uses
the
XRP
Ledger,
RippleNet
network
and
XRP
token
to
facilitate
faster
cross-border
transactions.
Ripple
has
claimed
that
it
can
provide
transaction
settlement
for
international
payments
within
seconds.
At
the
same
time,
other
factors
such
as
compliance
checks
and
network
congestion
also
have
a
significant
impact
on
transaction
settlement
with
Ripple. 

• 
  Cost
  and
  Transparency 

The
next
big
point
of
comparison
between
Ripple
and
Swift
is
the
cost
and
transparency
of
transactions.
Swift
imposes
the
burden
of
costs
due
to
the
involvement
of
multiple
intermediary
banks
and
charges
for
currency
conversion.
You
may
have
to
pay
higher
charges
for
intermediary
bank
fees
and
slower
settlement
times
that
keep
your
money
locked
up.
It
is
also
important
to
note
that
Swift
does
not
provide
the
assurance
of
transparency
into
transaction
fees
and
status
of
the
transactions.

Ripple
outperforms
Swift
by
a
huge
margin
in
terms
of
cost-efficiency
as
it
does
not
require
a
lot
of
intermediaries.
The
cost
of
one
transaction
on
Ripple
blockchain
is
around
$0.50
which
is
considerably
lower
than
that
you
have
to
spend
with
Swift
transfers.
On
top
of
it,
Ripple
upholds
the
value
of

decentralization
and
offers
real-time
tracking
of
the
transaction
status.
You
can
also
find
a
clear
fee
structure
with
Ripple
that
provides
the
advantage
of
transparency. 

Final
Thoughts 

Ripple
seems
like
the
most
promising
contender
to
take
over
global
payments
in
a
few
years.
You
can
trust
Ripple
for
international
payments
as
it
outperforms
Swift
on
all
the
major
aspects
such
as
transaction
speed,
cost
and
transparency.
Ripple
may
fall
behind
in
terms
of
regulations
and
widespread
adoption
as
Swift
has
an
upper
hand
in
these
two
areas.
However,
financial
institutions
seeking
solutions
for
large-scale
international
payments
will
find
Ripple
as
a
better
alternative
than
Swift.
Learn
more
about

Ripple
blockchain
to
understand
how
it
can
challenge
Swift
for
dominance
over
the
global
payments
industry
now.

*Disclaimer:
The
article
should
not
be
taken
as,
and
is
not
intended
to
provide
any
investment
advice.
Claims
made
in
this
article
do
not
constitute
investment
advice
and
should
not
be
taken
as
such.
101
Blockchains
shall
not
be
responsible
for
any
loss
sustained
by
any
person
who
relies
on
this
article.
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own
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