American Express has announced the creation of a blockchain-based business-to-business payments channel that will enable businesses to settle payments between the U.S. and the U.K. almost instantaneously.
Developed through a partnership between the American Express International Payments (FXIP) business, enterprise blockchain startup Ripple, and banking firm Santander UK, the blockchain-based payment channel will reduce the time it takes to settle international payments from days to seconds.
American Express says that the platform will route non-card payments through RippleNet — Ripple’s real-time payment network — reducing the number of intermediaries necessary to process transactions and providing greater end-to-end transparency.
“We’ve already seen evidence that blockchain technology is playing a transformational role in the way customers are served,” said Greg Keeley, executive vice president of global corporate payments at American Express. “Not only does this partnership with Ripple help decrease the time it takes for international transactions to be processed, it can make our transactions more effective for our customers.”
This payment channel could prove to be a game-changer for international payments between the U.S. and U.K., particularly if the two nations enter into a mutually-beneficial free trade deal after Britain exits the European Union.
Although this is one of the first major examples of blockchain technology receiving real-world implementation in an enterprise environment, American Express has been interested in the technology for some time now. Earlier this year, the credit card giant joined the Hyperledger Project, an open-source blockchain development working group.
The announcement is a also big win for Ripple, who has faced stiff competition from both Swift — a global banking platform that has begun building its own blockchain based on Hyperledger — and Stellar, a blockchain startup co-founded by former Ripple executive Jed McCaleb. Stellar, incidentally, has partnered with IBM to create a blockhcain-banking solution targeted at emerging markets.
The announcement does not include any mention of XRP — the native currency of Ripple’s public blockchain — but the XRP price nevertheless surged more than 20% following the announcement on speculation that it would later be integrated to provide platform liquidity and reduce transaction costs further.
“Transfers that used to take days will be completed in real-time, allowing money to move as fast as business today,” said Brad Garlinghouse, CEO of Ripple, and “we look forward to growing this partnership to help other American Express FXIP customers.”
“It is just the beginning,” he concluded.