Ripple has highlighted a new report issued by the Guardian which outlines an array of delays and errors that the traditional global payments network of SWIFT is prone to.
According to the global head of strategic accounts at Ripple, Marcus Treacher said the Guardian article represents a stark reminder of the importance of crypto, blockchain, and digital assets like Ripple.
It’s a reminder of why Ripple’s mission to revolutionize the global financial payments system is so important.
Timely reminder of why our Ripple mission is so important. Building the #IoV for super-fast, transparent and reliable payments worldwide https://t.co/TZ3iOVOaks
— Marcus Treacher (@marcus_treacher) December 9, 2018
The Delays and Errors in SWIFT
The Guardian article tracks 4 stories of people and charities having to deal with the inconsistencies, errors, and delays of the SWIFT cross-border banking system.
It portrays the problems of our current cross-border payment system, stating that the acronym SWIFT (Society of Worldwide Interbank Financial Telecommunications) has often “proved to be a misnomer.”
The first story exclaiming SWIFTs mishaps is regarding a charity who uses the SWIFT cross-border remittance service for the payment to schools in Zambia:
Elaine and Malcolm Thompson’s charity, St Paul’s Children’s Project, pays school fees and expenses for 36 orphans in Zambia. In October they made a payment using the Swift system of £11,000 from the charity’s Barclays account to its designated bank in Zambia, but it never arrived.
The above case reported an “observer” finally intervened and returned the money back to the charity. The Barclays Bank that facilitated the payment blamed the beneficiary bank in Zambia for the delays.
The next story is more personal where a family member lost their money in a SWIFT transfer to his mother-in-law:
Martin Finnegan was told the £2,450 sent from his Nationwide account to his mother-in-law in Russia would take an estimated three days. Three months later it was still in transit, location unknown.
Another story, this time with a substantial amount of money on the line, comes from a woman moving to Canada along with a £54,000 deposit for her new home:
In June, Jane Collins nearly lost the home she was buying after moving to Canada because the £54,000 deposit transferred from her Nationwide account went missing. It eventually arrived six weeks later. Nationwide blamed poor communications along the chain of banks.
The final story covered by the Guardian was about a woman who waited 5 months for her payment to reach a tour operator for a vacation she was taking:
Laura Fulcher waited five months for a £500 holiday deposit to reach her Ghanaian tour operator. It was eventually refunded after the Observer contacted her bank, TSB. It also repaid associated expenses and added interest and £50 in compensation for the ‘inconvenience’.
SWIFT: A Payment System with Flaws
As seen from the stories mentioned above, the SWIFT cross-border money transfer system is far from perfect with its fair share of flaws. For a system that’s used on a global scale every day, these types of problems should be non-existent.
Considering the fact that the SWIFT system is a 45-year-old secure message-sending service which relies on its 11 thousand members and manual inputs to transfer funds, it’s no wonder the system is as slow and flawed as it is.
The team at Ripple understands that the current SWIFT cross-border remittance system needs a complete overhaul in today’s data-driven technological society. Which is why Ripple is building a global payment network (RippleNet) and other payment services powered by blockchain technology.
Have you experienced any problems with cross-border payments through SWIFT? Let us know in the comment section below.
