The emergence of Blockchain technology and individuals to ask questions about the already established financial clearing systems. These questions range from the following;

Are they ideal enough to offer universal monetary messaging services?

Will they become obsolete?

What are the advantages and disadvantages of each one of them?

However, SWIFTNet and VisaNet have the ideal answer to such questions.

SWIFTNet — Explained

SWIFTNet was established in the year 1973 by the Society for Worldwide Interbank Financial Telecommunication; a financial cooperative.

The cooperative built the SWIFTNet for the sole aim of delivering an extremely secure and confidential system. This system allows the exchange of monetary messages around the globe.

With the SWIFT network, a whopping sum of roughly ten thousand monetary institutions, if not more, can transfer and receive information concerning each institution.

Before the emergence of SWIFT, TELEX was utilized. However, TELEX was not fast, and the network basically lacked the required security.

Key advantages of SWIFT includes;

The interactions on the network are fast and highly secure

It is accepted by roughly all banks around the globe

It is compatible with international formats ISO 20022. Even SEPA is included

In the year 2017 alone, the United Kingdom had the sum of 793 Traditional institutions using the network.

For SWIFT to function, individuals should have it in mind that financial institutions and banks utilizing SWIFTNet do not transfer money. Subsequently, they transfer a payment order between users of the system via SWIFT codes.

Some of the issues linked to SWIFT includes;

The transfers can delay for roughly five working days, sometimes.

The fees are frequently levied via correspondent and the recipient financial banks.

VisaNet — Explained

Unlike SWIFTNet, VisaNet is different. The platform was created fifty years ago. This was the time when VisaNet’s vision was to create the ideal payment for both businesses, government and consumers alike.

This was to be executed by utilizing a proprietary transaction processing system. VisaNet’s payment products range from;

Credit

Commercial

Debit

Prepaid

Money transfer

Mobile products, etc.

Meanwhile, these products are utilized by the monetary institutions on over two hundred countries. VisaNet can handle more than sixty-five thousand transaction messages each second.

VisaNet was built to deliver the newest technologies, provide mobile monetary services, etc.

Pros Of VisaNet

Some of the advantages of VisaNet includes;

It is dependable

It is scalable

VisaNet is flexible, etc.

The VisaNet is rated as the second biggest universal payment card establishment.

Cons Of VisaNet

For a transaction to proceed successfully, consumers and merchants must be users of VisaNet.

Individuals are exposed to fraudulent activities and even liabilities over card payments that have been disputed.

Clearing Utilizing The Blockchain

It is a well-known fact that blockchain is an open, distributed ledger than can document transactions between two or more parties. This is done in an effective and identifiable way.

Moreover, all parties can validate the documents of its transaction partners straight up without the aid of third parties. These transactions can be seen by everyone that has easy access to the network.

Meanwhile, these documented transactions cannot be eliminated or changed once they are added to the Blockchain.

With the application of Blockchain to the banking industry, it will play a vital role in the achievements of monetary companies. It will also help to resolve the issues banks are having.

Blockchain technology will basically eliminate the need for intermediaries. In turn, services will be much more affordable for consumers.

Is Blockchain A Threat To Banks?

At first, the financial institution was against the emergence of Blockchain. They saw Blockchain as a competition that was built to disrupt their management of individual’s funds and accounts.

Now, they are getting used to the concept. Some of the banks utilizing Blockchain all over the globe including;

China — Bank of China, Agriculture Bank of China, etc

Spain — Spanish banking Group, etc.

Russia — ALFA Bank

Singapore — United Overseas Bank

New Zealand — LatiPay

Australia –Commonwealth Bank, and so many more.

Conclusion

Generally, the only problem plaguing Blockchain technology centers on the fact that it has not been vastly accepted around the globe. However, even though banks are still taking in blockchain slowly, the key fact is that they are taking it seriously and even exploring the technology’s prospects with care.

See you with the next articles and updates.

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