SWIFT is a system of worldwide interbank financial communication channels that has been operating since 1973 and works with 11,000 banks and other financial institutions.
Transactions through the computer terminal enter the universal computer, are collected in the processor and processed in the operations center, after which the sender receives a notification of a positive or negative result. The system is often criticized for insufficient protection of customer data, in addition, the payment processing time is up to 5 days.
Transactions on blockchain networks are much faster and cheaper, and in recent years, SWIFT has begun to have competitors. One of the first was the Ripple blockchain platform, created specifically for working in the banking sector. Its principle of operation is similar to the principle of SWIFT, the main difference is decentralization. For several years of operation, the company’s products have been used by more than 200 financial institutions.
But SWIFT offered its own solution: a few years ago, the company introduced GPI (Global Payments Innovation) – a cloud computing system that allows corporate bank customers to make and track payments faster. In response, the head of Ripple, Brad Garlinghouse, said that it was like a car against a horse and cart. When servers with software are disabled, GPI will become unavailable, and Ripple will continue to work as long as at least one of the many servers supports it.
However, the development of GPI continues, and the system is trying to eliminate the underlying problems. In the summer of 2019, SWIFT once again tested cross-border payments.
The GPI Instant test with Singapore’s internal instant payment system FAST, which involved seventeen banks from seven countries, achieved an average speed of 25 seconds. The best result was only 13 seconds.
The main launch of GPI Instant is scheduled for the end of 2019. With such a speed of transactions, it is obvious that this system can compete with blockchain networks.