American Express (AmEx) and Santander have teamed up with Ripple to speed up cross-border payments between the U.S. and the U.K. via blockchain technology.
Non-cards payments by American Express’ FX International Payments (FXIP) will route through Ripple’s real-time blockchain network RippleNet.
The partnership will help AmEx business customers to make traceable payments to Santander bank accounts in the U.K. within no time. Both AmEx and Santander expect the blockchain project to eventually extend worldwide.
We’re excited to announce @ AmericanExpress joined RippleNet! Instant payments are now live between the US – UK!https://t.co/nPSjUTmqUy
— Ripple (@Ripple) 16 November 2017
“This collaboration with Ripple and Santander represents the next step forward on our blockchain journey, evolving the way we move money around the world,” Marc Gordon, executive vice president and chief information officer at American Express, said in a statement Thursday.
“This blockchain solution opens up a new channel between the U.S. and the U.K. and presents significant opportunity for payments globally”, Jose Luis Calderon, global head of global transaction banking at Santander, said in a statement Thursday.
Blockchain is known as a distributed ledger technology capable of storing vast amounts of data on a scattered network of computers around the world rather than on a single centralized server. The technology was basically used to store Bitcoin transaction records, however businesses are finding alternative uses like instant payments, data storage, trade finance and identity verification.
Financial firms like JP Morgan, USB, Credit Suisse, Barclays and HSBC have also been experimenting with the blockchain ledger technology.
Ripple CEO Brad Garlinghouse said that payments by business customers of financial services institutes would move across border in “real-time” with the help of its blockchain network.
“We’re taking a huge step forward with American Express and Santander in solving the problems corporate customers experience with global payments. Transfers that used to take days will be completed in real-time, allowing money to move as fast as business today,” Garlinghouse said in a statement Thursday.
Ripple stated that it has already experimented speeding up payments using its cryptocurrency XRP, that would become a key feature in its partnership with financial firms and banks.
“The XRP currency will come into play later on in the evolutionary dynamics and the other players,” said Marcus Treacher, global head of strategic accounts at Ripple.
“The technology we have developed, it separated a connection from the cryptocurrency or the token. So what that means is that a bank or non-bank like AMEX can use Ripple to connect and just exchange value from one fiat currency to another directly, without the need for any intermediate blockchain currency.”
However, most of the banking executives are not satisfied and have raised concerns about cryptocurrency.
Sergio Ermotti, CEO USB said last month that he was “not necessarily a believer in cryptocurrencies” but saw a future for blockchain. Tidjane Thiam CEO Credit Suisse went a little further and described Bitcoin as “the very definition of a bubble.”
Similarly, JP Morgan’s Jamie Dimon who has been notably criticizing Bitcoin said that anyone “stupid enough to buy bitcoin” would “pay the price for it one day.”