Interviewed By The Asian Banker Live
Marcus Treacher, Senior Vice President of Customer Success at Ripple, discusses challenges in expediting payment processes from a clarity, visibility, and reliability perspective and talks about Ripple’s solutions focused on the open internet model.
Here is the transcript:
Boon Ping: Tell us how the industry is looking at blockchain as an alternative?
Marcus: It’s really about looking at the payments challenge for cross-border in a whole new way and what we are doing at Ripple is using blockchain technology to rethink how money should move cross-border around the world. We are creating an internet of value. We do that by interconnecting bank technology in one country with another country and we create the ability for banks and payment companies to move money between themselves in seconds with absolute finality, with visibility that are very competitive rates.
Boon Ping: As part of the whole preferred network, at last count, how many banks have you got in terms of your expansion and acquisition? Could you share what are your strategies? Illustrate an example
Marcus: We are growing very quickly. We are growing a lot in the emerging markets. So, there is a lot of activity in the Middle East and in India as you mentioned during the introduction, in Southeast Asia, and also in Latin America, we are seeing a lot of growth as well in Northern Europe, so there is really a nice global coverage that is building very quickly. We are on-boarding payment companies as well as banks, so we are dealing with some of the most advanced FinTech companies in the world in the payment space. TransferGo, a super organization working in the U.K. which is connected to Axis Bank in India and therefore paying into Immediate Payment Service (IMPS), which is the very high-speed high-volume immediate payment network for India. They can deliver into banks in India very quickly via the gateway of access powered by Ripple. So, working with those organizations and also some of the really big major league banks that are moving onto new payment routes like Santander, for example, Standard Chartered, we are working with a broad portfolio, means we can move very quickly and also we have really high impact by taking the leaders with us in this transition. It’s high time. I think the world’s been working on very old rails, old technology at its core for a long time. The banking world’s kind of lost pace with the rest of commerce and society which is moving onto a much more real-time globally-connected environment.
Boon Ping: So, Ripple as payment alternative brings many advantages, one of which is the liquidity that comes from the token, XRP. Tell us more in terms of how Ripple is a payment alternative and what are some of the volume numbers?
Marcus: Ripple is looking at the payment problem. If you look closely, actually the payment problem has got two parts. One part is that it is very difficult to move value quickly between countries with clarity, visibility, and reliability. The second part is companies and banks have to hold a lot of liquidity around the world in many currencies just to facilitate those payments when they happen. So, two problems, with Ripple, we have created a suite of propositions, services, products which we call Ripple Net, which both tackle the movements of value, the immediate payment, and also tackle liquidity. So, for the payment side, we have created a product called xCurrent and xCurrent is what is at the heart of the Ripple network. That connects banks and payment companies together and enables money to move in seconds around the world. The other component is xRapid. xRapid is where we can separately connect into the XRP ledger for very fast delivery of liquidity into the target country as required. When you put those two together, you get a very powerful payment delivery proposition which is using blockchain technology but does not use any token, supported by a really powerful liquidity proposition which does use the token XRP. We don’t release the full figure but it’s growing very, very quickly. We are signing up a new bank or payment certainly once a week, maybe more frequently, so we are building very, very quickly. Again, the key point is we are building on a global level and we don’t have a concentration in one region. We are picking up very good customers – yeah that is very important. Following this growth very quickly, again, we don’t release those figures, but it’s growing very, very quickly both in terms of the absolute counts or transactions and the dollar value that we are moving. We look at both, although for us, the real impact because our target is that high-volume flow, whether its retail payments or SME or promotional payments which we feel will be the bedrock of the 21st-century economy. So, we really focused on the volume of payments we’re creating which is building very nicely.
Boon Ping: Do you see yourself as an alternative to SWIFT?
Marcus: It’s a big world and I like to think in terms of transport. So, a hundred years ago, there were no aircraft, there were no commercial airlines. There were trains. Today, most people that are in the SIBOS conference have flown to Australia, but you still have trains. They are still used. I think with the SWIFT and Ripple model, there may still be a role to play for the older hub structure messaging model such as SWIFT, however, we feel that for the bulk of payments, the real commercial flows and the resale flows, that will move to a much more open interconnection model which Ripple has created. So, certainly, we will dominate that central space. Whether that leads to a complete move into Ripple or not, we don’t really mind. It is a big enough world. If Ripple is seen as an alternative to SWIFT at some point, then okay fine, but our sweet spot is bringing that high-volume, commercial flow which we think in the 21st century will be really, really important to support the economies of the world. We have worked with the banks in the community very closely for much of our history. In doing so, we have configured our technology in a way that really fits the problem of cross-border payments liquidity very, very well. So, for the cross-border payment challenge, we have created an open internet model and we called the idea Interledger. Through Interledger, like the internet, supports are Ripple technology globally and that model does not require a single universal common blockchain. It requires a very open blockchain interconnectivity. That means that the volume is theoretically infinite. The internet never runs out of capacity. The elements do, but the internet still works because it’s inherently decentralized. So, Ripple is the science. We have a decentralized model which is infinitely scalable. Supporting that, we have our liquidity proposition which uses XRP and that’s a classic blockchain, but XRP was designed from the outset for transacting. So, unlike the likes of Bitcoin, which is very slow and slows down as you continue to build on volume, the XRP model very, very, very high-speed and very high-capacity. So, the liquidity part is very eloquently served by the XRP model. The wider network we are creating where if you are really going to create something of value for 7 billion people in the world and for 9 billion people by 2050, you have got to have a very open internet-type model and that is what we have with our xCurrent Ripple net model. To your point, we got to that solution by working with our banks and our partners who gave us feedback and helped us work. Because we are inherently an engineering firm, we get our hands dirty, we develop, we work things out physically, and I think we move very, very quickly to really fine-tune what we have.
Boon Ping: In SIBOS, payment innovation is a big topic. There is a lot happening on domestic real-time payments. How does the Ripple solution work in concert with domestic payments? Obviously, Ripple payment is more cross-border, right? Can you talk about India, into Asia, and US itself? Are you also sort of being in other markets?
Marcus: We do. So, the Ripple technology complements faster payments in-country very, very well. Yeah, IMPS, for example, in India. So, those countries increasingly adopt high-volume immediate payments domestically then connecting cross-border becomes really important, otherwise, you have a really super experience within the country, but companies and people, SMEs, are increasingly working internationally. Why have a bad experience cross-border? So, Ripple solves that problem very elegantly. We work very well with countries or banks in countries which have very high-speed clearing because we then connect them out to other parts of the world. We think within the next 5-10 years, the majority of economies will be supported by very high-speed clearing that works domestically which is really good for Ripple. I think also it is worth pointing out that if you look at how money moves in its entirety, it really consists of pools of value by currently. There’s a dollar pool, sterling, Australian dollar, euro, yen. And with the blockchain, there is also pools, individual islands of value. We think in future; those islands will increase in number. There will be many, many of them. So, what is required is technology to interconnect them which is what the internet does to data. The internet is kind of a web of connectivity that binds together very different databases around the world. That’s how the whole thing works. So, Ripple is the equivalent of that in the financial world. Rather than connect databases, you can imagine clearing networks of value, whether it’s accounts like sterling or like euro, or whether it is a digital asset. Because we interconnect very well using our method, we really are out on our own. We created the ultimate web, if you like, of the internet of value.