Move over contactless – international B2B blockchain payments are now possible through American Express, Santander, and cryptocurrency firm Ripple.
Non-card transactions can now be routed via Ripple’s payment network RippleNet. Blockchain-enabled payments simplify connections with intermediaries and provide end-to-end visibility into transaction status and cost, according to AMEX. It is thought the technology will reduce transaction times, combining the burgeoning cryptocurrency market with global B2B payment networks.
Initially, Ripple will connect American Express customers to Santander in the UK, providing immediate, trackable, cross-border payments. RippleNet says it is helping remittances from American Express customers in the US to reach UK bank accounts in reduced time through Santander. However, there could be scope to extend the payment network to other countries, say the technology developers.
José Luis Calderón, Head of Santander Global Transaction Banking, said, “This blockchain solution opens up a new channel between the US and the UK and presents significant opportunity for payments globally”. Mr. Calderón branded the system a “friction-free payment solution”.
Marc Gordon, Executive Vice President and CIO at American Express, said the channel has potential to expand in future “evolving the way we move money around the world”.
Ripple, founded in 2012, claim their cryptocurrency XRP transfers in just 4 seconds compared with Ethereum and bitcoin, which it says can minutes and one hour plus, respectively. However, XRP is nowhere near as highly valued as the blockchain major players. Brad Garlinghouse, CEO of Ripple said: “Transfers that used to take days will be completed in real-time, allowing money to move as fast as business today.”
The channel launch follows the global payment solution created by R3, HSBC, Barclays and 22 other international banks. A 2016 Accenture report found nine in 10 executives said their bank is exploring the use of blockchain, with three-quarters involved in R&D of blockchain strategy.
Significant price fluctuations in bitcoin and other blockchain currencies have attracted criticism from financial leaders including JPMorgan’s Jamie Dimon in recent months. The CMA issued a warning this week saying cryptocurrencies are “extremely high-risk”.
“The XRP currency will come into play later on in the evolutionary dynamics and the other players,” Marcus Treacher, global head of strategic accounts at Ripple, told CNBC. Mr Treacher explained RippleNet enables exchange value from one fiat currency to another without need for an intermediate blockchain currency.