Financial services giant American Express has made blockchain history today, following the announcement of their successful launch of the first transatlantic payments corridor to be built on blockchain.
The model, which functions on the Ripple blockchain, enables payments to be sent between North America and Europe in a matter of seconds, vastly reducing transaction settlement times against today’s norms.
Payments of this type via the Swift network currently take a minimum of one to two days to clear, while ACH payments can take even longer. With the newly launched system making it possible to settlement payments from London to New York in seconds, analysts are hailing the development as significant.
The model relies on Ripple, a blockchain designed specifically to address use cases in payments and financial services. Marcus Treacher, head of strategic accounts at Ripple, said the American Express technology would allow for payments to be sent more quickly and securely than at present.
Treacher, who previously served on the board of Swift, said the model allowed American Express to connect directly to bank systems for virtually instant transfers.
“Whereas beforehand Amex had to send Swift messaging to the banks to request the payment to happen, now Amex is connected directly to the banks using Ripple and Ripple’s cryptography, so that the movement of value happens immediately.”
The technology was developed in partnership with the major European bank Santander, and could pave the way for further similar innovations in financial services use cases.
The payments corridor is to be run as part of Amex’s foreign exchange and international payments business, and connects Amex customers in dollars with bank accounts in Pound Sterling directly via the RippleNet blockchain.
The launch marks only the latest foray into blockchain technology for American Express, following on from their earlier decision to join the Hyperledger blockchain consortium, in addition to a development partnership with crypto payments app startup Abra.
For Ripple, the move represents the latest direct link between banks over their network, following an earlier development with Swedish bank SEB, which has already handled over $630 million in transaction volumes since its launch earlier this year.