SWIFT has announced it will universally adopt the global payments innovation (GPI) service. All 10,000 banks in the SWIFT network will use GPI for cross-border payments.
Banks will be transferred to the new service before the end of 2020. So far, 180 banks have been subscribed to GPI. The expansion may be due to the growing competition with Ripple. However, SWIFT representatives deny this.
"No other service has been able to safely deliver hundreds of billions of dollars in payments around the world in minutes or seconds. The time is now right to accelerate the adoption of GPI, ensuring that all banks on the network adopt it,” Yawar Shah, the chairman of Swift says.
What is GPI?
GPI is the standard of international payments. It helps increase the speed and transparency of payments through the detailed information. Therefore, there are fields about the status of payment (executed / rejected), the date and time of receipt to the compliance service, the execution of payments, and other information in the system.
The project improves the speed of processing and transfer of cross-border transactions, transparency of transactions, and helps to track a financial transaction at any point in history. The speed of such payments is also increasing, and the beneficiaries are able to use the funds on the day of dispatch.
The application GPI Tracker also allows users to monitor the status of payment in real time, check the information for each bank on the payment path and the commission charged at each stage. The system sends confirmation to both counterparties when the payment is received by the final beneficiary.
SWIFT vs Ripple
Ripple is also a key player in cross-border payments but both companies deny that they are direct competitors. Representatives of the banking sector also note that they do not prefer any specific companies, but are interested in improving the system international payments in general.
There are some differences between the projects. The Ripple network has become a pioneer in the provision of tracking services for payments. However, GPI also allows this. As a consortium owned by world banks, SWIFT enjoys an advantage in its field and the GPI system relies on cloud computing, not blockchain.
Ripple's representatives to the project are skeptical but the company is confident that transnational transactions should be implemented on blockchain-based technology in the future, as this is more reliable and efficient. “The error rate published by SWIFT is six percent. Imagine if six percent of your emails had not passed without further human intervention,” Ripple CEO Brad Garlinghouse said.
In February 2018, Western Union reported testing the Ripple technology for international transfers. “Efforts are in a testing phase and not a key part of the business,” the company’s CFO Raj Agrawal said. The company hasn’t found anything yet that would equate to a “big unlock,” he added.