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- SWIFT has recently showcased how its payment pre-validation system helps reduce friction in online payments.
- Some users pointed out that Ripple has been implementing it way back and more efficiently via its XRPL ledger.
San Francisco-based blockchain startup Ripple has emerged as one of the go-to platforms for cross-border instant settlements. Although mired in different controversies and a legal battle with the SEC, Ripple has continued to accelerate its growth in building blockchain-based solutions.
Some of the most popular Ripple solutions include the RippleNet and the XRP-based instant settlement via XRP Ledger. When it comes to cross-border Ripple has been pitching direct competition to the world’s most widely used SWIFT payments system.
Recently, the official handle of SWIFT shared how they have successfully implemented payment pre-validation and how it has helped “the financial community realize a frictionless future by checking cross-border payments for errors upfront”.
Want to say goodbye to unnecessary #payment errors?
In this article, Mireia Guisado Parra shares how Payment Pre-validation is helping the financial community realise a frictionless future by checking cross-border payments for errors upfront.
Read more: https://t.co/wCKk8V5TXu pic.twitter.com/EUbYy079kU
— Swift (@swiftcommunity) January 9, 2023
In their research, SWIFT found that 72 percent of payment exceptions on the SWIFT platform happen as a result of account issues, formatting errors, and invalid data. To solve this, they introduced payment pre-validation offering an extra layer of assurance when it comes to cross-border settlements.
The payment pre-validation solution involves tasks such as “checking whether the beneficiary account is open and ready to receive funds, and that the inputted name matches the one on the account”. With this feature, SWIFT seeks to create a frictionless experience for its customers which would effectively help the international supply chains.
While SWIFT has been showing its prowess with payment pre-validations players like Ripple have already implemented it long back.
Ripple Challenges SWIFT
The Ripple blockchain network has been challenging the traditional and widely accepted SWIFT payments system at every frontier. Back around May 2020, Ripple became part of the ISO 20022 Standards Body. Ripple became the first company focused on DLT to join this global standard for payments. This allows Ripple to create a common model for payment data globally.
Ripple’s blockchain-based settlement solution rippleNet has been in the market for over four years now and has been adopted by some of the leading financial institutions worldwide. While SWIFT has been flashing its payment pre-validation systems now, Ripple implemented them way back using the power of blockchain.
Responding to SWIFT’s latest flex over payments pre-validation, one Twitter user wrote:
Ripplenet’s been doing pre-validation since 2018. That’s not the juice. The juice is it can settle payments (via ODL) in less than 1 minute.
By using the XRP tokens, Ripple’s XRP ledger provides on-demand liquidity (ODL) facilitating instant cross-border settlements worldwide. Along with this, Ripple is also gearing up to provide the platform for central bank digital currencies (CBDCs)to cater to the trillion-dollar market. Ripple is confident that its XRP Ledger is capable of handling transactions for stablecoins and CBDCs at a very large scale.
