Real-time international payments are now possible between the US and UK.
American Express this week announced that it has introduced instant blockchain-based payments through Ripple, a Fintech start-up. The service is aimed at corporate customers in the United States who send funds to businesses based in the United Kingdom that bank with Santander UK STN.
The announcement was made on Thursday.
During the announcement, American Express said that its FX International Payments (FXIP) business had joined hands with Ripple. The service will allow real-time, trackable cardless payments from the United States to Britain. The two companies have said that customers have already made use of the service.
There are now hopes that the service will be extended to other countries in the future. The joint ventures have marked one of the first major uses of blockchain worldwide. Blockchain is a shared database of transactions which is maintained by a network of computers. The service is internet based and is also best known as the structure underpinning Bitcoin.
It is strongly believed that financial firms hope the emerging technology can reduce the cost and complexity of international payments. These payment processes can often be burdensome to businesses who rely on international payments. But, many field experts also say that the widespread use of the technology is still a number of years away.
American Express’s chief information officer Marc Gordon said in a statement that the company had a long an trusted history of integrating new technologies. He added that the collaboration with Ripple and Santander represented the next logical step forward for the company’s financial blockchain journey. Gordon said that the collaboration was evolving the way people move money around the world. Ripple which is based in San Francisco has maintained that its main focus is blockchain-based cross-border payments for businesses.
The company works with many big name banks internationally and is also backed by strong financial firms including the likes Standard Chartered Plc, Accenture Plc and SBI Holdings among others. Currently, Ripple is in a tough legal battle with rival blockchain startup R3 Holdco LLC. The spat ensued over an options contract to purchase the digital currency which belongs to Ripple.
In a time when digital currencies have soared in price, Ripple’s XRP was no exception. The currency increased in value by more than 30 times. Ripple CEO Brad Garlinghouse has said that the collaboration with American Express will allow real-time transactions to take place.
In a statement, he said that previously these transactions would take days to complete and would frustrate businesses and individuals alike. Essentially this will allow money to move across the globe at the same pace which business is being conducted.