For those unfamiliar with blockchain technology, it can be described in simple terms as a secure method for electronically transferring money or files using decentralized, distributed computers that record the path of each transaction as it moves along, block-to-block, until it reaches its intended destination. Blockchain technology first came to use as a secure way to move financial assets like Bitcoin, because the chain provides a record that cannot cannot be altered after the fact.
Evolving the Way We Move Money
Under this new initiative to make blockchain payments commercially available, the American Express FX International Payments (FXIP) division is working with Ripple, a proven provider of enterprise global blockchain solutions. The joint payment-transfer solution will help reduce the time and cost for transfer payments to settle, and provide other benefits for business-to-business (B2B) buyers and sellers.
The initial service will focus on payments between U.S. and U.K. businesses, with Santander U.K. managing the transaction channel. Further expansions are expected soon.
AmEx Executive VP and CIO Marc Gordon said the collaboration with Ripple and Santander represents the next step forward on the blockchain journey for American Express, “evolving the way we move money around the world.”
Speed Is Key
By integrating Ripple into the American Express FXIP platform, non-card payments can be routed through Ripple’s real-time payment network, known as RippleNet. Compared with traditional payment processes, blockchain-enabled payments improve international transactions by simplifying connections with intermediaries, and by providing immediate, end-to-end visibility into transaction status and cost.
When it comes to moving money, speed is obviously a key factor.
“We’ve already seen evidence that blockchain technology is playing a transformational role in the way customers are served,” said Greg Keeley, Executive VP of Global Corporate Payments at American Express.
Initially, Ripple will connect American Express customers to Santander in the UK, providing instant, trackable, cross-border payments. Remittances from AmEx customers in the U.S. will reach U.K. bank accounts faster than ever before, thanks to Santander’s involvement. As expansion continues, Ripple’s payment network will have the ability to enable American Express to connect with customers elsewhere around the world.
Huge Step Toward Solving Global Payment Problems
Ripple CEO Brad Garlinghouse said the new initiative with AmEx and Santander means a huge step forward 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.”
Indeed, more and more businesses are turning to blockchain technology for the security it promises. Ripple reports that it already has more than 100 customers using its global network to process customer payments instantly, reliably and cost-effectively around the world.