Can SWIFt GPI save correspondent banking, which is in danger of extinction due to the popularization of the RippleNet payment system? Both systems have advantages and disadvantages. Financial corporations must adapt to the new market conditions, which offer cheap, transparent and fast payment solutions.
The advantage of SWIFT is that it is the largest payment network with more than 11,000 banks around the world collaborating. SWIFT GPI is a truly big step towards security, transparency and speed of transaction processing. Currently, SWIFT GPI is used by 165 banks.
The three key functions of SWIFT GPI are:
GPI tracker
GPI browser
GPI directory.
The tracker provides complete tracking of processed payments.
The GPI Observer monitors GPI members' compliance with the rules necessary to conduct transparent cross-border payments.
The GPI Directory provides a complete list of GPI member banks and allows corporations/financial institutions to implement automated routing techniques.
The developers of SWIFT GPI are also looking to improve the market infrastructure to achieve interoperability between domestic and international payments.
Ripple, on the other hand, is built using distributed ledger technology and also has an ILP protocol-extended structure that is designed to solve scalability and interoperability issues. The Ripple product suite consists of many technologies for payment systems - Ripple Net, xCurrent, ILP, xRapid, xVia. These technologies are revolutionary in the field of payment processing, and therefore are considered as the main competitor to the SWIFT monopoly. Using Ripple payment systems, users can make transactions that take a second, while SWIFT GPI processes the transaction from 30 minutes to 24 hours.
It was the emergence of Ripple that influenced the creation of new payment system standards by SWIFT - previously, all shortcomings were ignored and taken for granted. This is good news for most businesses that have suffered losses due to ineffective systems. SWIFT GPI and Ripple payments are two emerging areas in the payments market that are solving existing problems with different approaches. Large financial institutions can now adopt technology that meets the specific criteria required for their operations.
The SWIFT monopoly ends.
According to finextra.com
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