American Express has partnered with Ripple to speed up cross-border payments between the U.S. and the U.K. by using blockchain technology. In an announcement made by RippleNet today, November 16, 2017, "American Express is the latest company to become a member of RippleNet, joining the ranks of Credit Agricole, Airwallex, Cuallix, and more."
Ripple CEO Brad Garlinghouse said that its blockchain network would allow the business customers of financial services firms to move money in "real-time."
"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 today.
What's new for American Express users with this partnership?
In the present system, run by American Express's Foreign Exchange International Payments (FXIP) business, the corridor connects Amex customers in the U.S. using U.S. dollars to Santander bank accounts in the UK using British pounds. Now, all these will be moved via Ripple's blockchain, RippleNet. However, the involvement of XRP, digital currency of Ripple may come later.
"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 in an interview. According to Treacher, the integration routes non-card payments through the shared payment network for nearly instant, auditable cross-border payments.
American Express executive vice president of global corporate payments Greg Keeley said,
“We’ve already seen evidence that blockchain technology is playing a transformational role in the way customers are served. Not only does this partnership with Ripple help decrease the time it takes for international transactions to be processed, it can make our transactions more effective for our customers.”
American Express has opened up a payments corridor using Ripple that can send money from England to the U.S. in just a few seconds.
Signs of moving towards blockchain adoption
About a couple of years back in an annual summit of top financial services and government leaders at the New York Times DealBook conference in Manhattan, Kenneth Chenault, Chairman and C.E.O. American Express spoke out on blockchain technology.
“The protocol of Bitcoin is going to be important” he said.
Though he saw more promise in Bitcoin’s underlying technology than in its use as a currency.
The announcement is also a big win for Ripple as in less than a year, after the above statement, American Express indicated that they would become a contributing member and work with Linux Foundation-led Hyperledger blockchain project that could lead to new kinds of services for its customer base.
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