American Express has joined forces with Ripple to enhance cross-border payment efficiency between the United States and the United Kingdom using blockchain technology. This collaboration, announced in late 2017, integrates American Express into RippleNet—a growing network of financial institutions that includes major players like Crédit Agricole and Airwallex.
The partnership focuses initially on transactions between U.S. dollar-based American Express accounts and Santander UK accounts in British pounds. By leveraging Ripple's distributed ledger technology, payment processing times are dramatically reduced, moving from several days to near-instant settlement.
Ripple CEO Brad Garlinghouse emphasized the transformative potential of this development, stating that real-time transactions are critical in modern business environments. The integration aims to improve transparency, reduce costs, and enhance the overall customer experience in international payments.
How the American Express-Ripple Partnership Works
The collaboration utilizes RippleNet, Ripple’s blockchain-based payment infrastructure, to facilitate transactions between the U.S. and the U.K. Here’s how it benefits users:
- Real-Time Settlement: Transactions that previously took days are now completed within seconds.
- Enhanced Transparency: Each transaction is recorded on a distributed ledger, providing full auditability.
- Lower Costs: By bypassing traditional intermediaries, the system reduces transaction fees.
Initially, the service does not utilize Ripple’s native digital asset, XRP. However, Ripple executives indicated that XRP may be incorporated in future phases to further improve liquidity and speed.
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Executive Insights on the Collaboration
Greg Keeley, Executive Vice President of Global Corporate Payments at American Express, highlighted the strategic importance of adopting blockchain technology. He noted that the partnership with Ripple aligns with the company’s goal to improve transaction efficiency and customer satisfaction.
Marcus Treacher, Global Head of Strategic Accounts at Ripple, added that the system is designed to handle non-card payments through a unified network, ensuring speed and reliability.
Broader Implications for Blockchain in Finance
This partnership is a significant milestone in the adoption of blockchain technology within traditional finance. American Express had expressed interest in blockchain innovation prior to this collaboration. In earlier public statements, then-CEO Kenneth Chenault acknowledged the importance of Bitcoin’s underlying protocol, though he emphasized its potential beyond digital currency applications.
The move also reflects a broader industry trend where established financial institutions explore blockchain to modernize legacy systems. Prior to working with Ripple, American Express had also participated in the Linux Foundation’s Hyperledger project, signaling a sustained commitment to distributed ledger technologies.
Frequently Asked Questions
What is RippleNet?
RippleNet is a decentralized global payment network that uses blockchain technology to enable fast, low-cost, and transparent cross-border transactions. It connects banks, payment providers, and corporations through a unified protocol.
Does this partnership use XRP?
Not initially. The first phase of the American Express and Ripple collaboration uses RippleNet without XRP. Future expansions may incorporate XRP for enhanced liquidity and transaction speed.
How does blockchain improve cross-border payments?
Blockchain reduces reliance on intermediary banks, shortens settlement times, increases transparency, and lowers transaction costs. It allows payments to be processed in real-time with full traceability.
Is this service available to all American Express customers?
Initially, the service was designed for business customers conducting transactions between the U.S. and the U.K. via American Express’s Foreign Exchange International Payments (FXIP) division.
What was American Express’s previous stance on blockchain?
American Express had shown interest in blockchain prior to this partnership. Former CEO Kenneth Chenault recognized the significance of Bitcoin’s protocol and the company later joined the Hyperledger consortium to explore additional blockchain applications.
Are other financial institutions using similar technology?
Yes. Numerous banks and payment service providers are integrating blockchain solutions to improve efficiency. RippleNet alone includes institutions like Santander, Crédit Agricole, and Cuallix.
The collaboration between American Express and Ripple marks a notable step toward the modernization of international payments. By implementing blockchain technology, the companies are addressing long-standing challenges related to speed, cost, and transparency in cross-border transactions.
This initiative not serves the immediate needs of business customers but also sets the stage for broader adoption of distributed ledger technology across the financial services industry. 👉 Learn more about advanced payment technologies