Opinion: The European Central Bank [ECB] recently announced that they would be launching a system for faster payments in the Eurozone. This system is known as Target Instant Payments System, and aims to offer a settlement of instant payments in Euro, with users being able to access it any time of day and any day of the year. At first glance, this might be the beginning of the end for the actual use-case of crypto-assets. However, one digital asset may as well benefit more from this move than many may think.
The system requires payment service providers to set aside a portion of liquidity in their respective central bank, which will then act as a way to settle instant payments. The system also promises no minimum wait during the process, and transaction settlement across the clock. This is all done with an end-to-end processing time of 10 seconds or less, with measures put in place to ensure that the system can be scaled effectively to meet the needs of the users. It also gives businesses another product to sell their consumers on, as instant payments are slowly becoming the new norm.
Benoît Cœuré, a member of the Executive Board of the ECB, said in a speech earlier this year:
“Indeed, in the euro area, where different legal frameworks and customer habits prevail, there is always a risk of new fragmentation arising from the development of national or closed-loop solutions which are not interoperable. To counter this risk, the European payments industry is now launching a truly pan-European instant payments scheme.”
The launch of this platform looks like the dragon has finally defended its stash of gold from the decentralized knight in shining armor, that is cryptocurrencies. With central banks effectively dismissing them as a way to conduct cross-border transactions, the technology seems to be dead in the dirt as vultures pick at its remains to adopt blockchain into their various ventures.
However, this is not necessarily true as Ripple, the FinTech company aspiring to solve the cross-border payments ecosystem, seems to have ensured its place in the future of evolving payments. They have achieved this through two main moves, with the primary being their partnership with TAS Group.
TAS Group is a company which focuses on business innovation in the financial sector, and have released a bevy of software for use with banks. They aim to deliver “electronic money, payment systems, capital markets and extended enterprise” solutions to payment providers, with one of their products being the latest version of the Bank Liquidity Management platform. This reportedly allows for the forecasting of the liquidity situations for the banks that have implemented the system.
Most interestingly, it offers maximum interoperability with the newly announced TIPS payment standard, and is aimed at allowing for a seamless transition between existing systems. TAS Group has been in a partnership with Ripple for about 3 years at this point, with a document released in 2015 detailing the benefits of Ripple over existing Real-time Gross Settlement [RTGS] systems.
The launch of TIPS is scheduled to be around the end of this month, with TAS Group poised to take control of the emerging market. Those who are up-to-date with Ripple’s developments may also know that the company promises added interoperability between their widely adopted xCurrent product and their XRP-powered xRapid product.
There was also a document released by Fidelity National Information Services [FIS] that reveals the second method used by Ripple in order to continue being a market leader in frictionless payments. This is through the implementation of an open API for integration onto Ripple’s networks, a technology that is touted as being the future by FIS in their report.
As seen by their infographic, Ripple’s third product, xVia, ticks many of the boxes required to be a disruptive force in the API space as well. This was also touched upon by Benoît Cœuré in his speech, where he stated:
“Cross-border interoperability is just one area where progress can be made. Extending access to our RTGS system to regulated non-bank payment service providers is another avenue that promises to make our current systems fit for the future.”
This proves to make a strong case for systems like Ripple’s to take over the market for cross-border payments. The short-term flow of capital through Ripple’s networks might also result in liquidity being sourced from xRapid partners operating in the Eurozone. The effect of the launch is now awaited with bated breath.
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