American Express will enable its FXIP users to route payments through Ripple’s enterprise blockchain network before they reach Santander U.K. bank accounts. Reuters reports the trial is intended to connect U.S. customers to the U.K., providing a viable demonstration of blockchain use in financial services that involves three different payment bodies.
American Express users who try out the technology will be able to deposit funds in a Santander U.K. account almost instantly. The cross-border payments will complete hours or days faster than a regular bank transaction. Transparency will be ensured by the open nature of the blockchain’s digital ledger. This will provide full traceability for every payment made.
How does blockchain work?
Blockchain tech stores information about transactions across a network of computers. Data added to the blockchain can be independently verified by any of its consumers, providing both security and transparency.
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The blockchain is most commonly associated with cryptocurrencies such as Bitcoin but is now being seized upon by businesses as a way of streamlining operations and improving the customer experience.
The wave of the future
Offering instantaneous cross-border payments provides a glimpse into the future of the financial services market. Banks are beginning to embrace emerging technologies as customers demand similar opportunities to users of fintech platforms. Several major banks and financial providers are already evaluating blockchain tech but the collaboration between American Express and Santander is one of the first public trials of the idea.
“This collaboration with Ripple and Santander represents the next step forward on our blockchain journey, evolving the way we move money around the world,” CNBC reports American Express CIO and executive vice president Marc Gordon, said in a statement today.
Ripple’s platform provides a global blockchain network for consumers and providers of financial services. Its website lists over 100 customers and 75 commercial deployments who are using its RippleNet infrastructure to remove the friction from cross-border payments. Its partnership with American Express and Santander is the latest application for its technology, claimed to offer reduced costs and a simpler payments experience.
