Midway into 2019, Ripple is broadening its clientbase in order to boost growth and capture emerging market volumes, according to Marcus Treacher, SVP of customer success at the cross-border payment blockchain scaleup.

“We’re targeting both payment companies and banks,” says Treacher. “We’re very much focused on building our bank client base, as well as building a base in the fintech world,” says Treacher.

Despite bursting onto the scene a few years ago with a list of pilot banks including Santander, PNC Bank and SEB, Ripple’s partners of late have predominantly been emerging markets focused peer-to-peer international payment companies.

Those companies include Euro Exim Bank, SendFriend, JNFX, FTCS, Ahli Bank of Kuwait, Transpaygo, BFC Bahrain, ConnectPay, GMT, WorldCom Finance, Olympia Trust Company, Pontual/USEND and Rendimento, according to the latest press release in January 2019, announcing the company had surpassed 200 customers.

But Treacher acknowledges the importance of banks in international payments, admitting that most of the scaleup’s traffic goes through bank customers. The solution and future of international payments relies on a duopoly between fintechs and banks, believes Treacher.

“The reason [we’re going after banks and fintechs equally] is because the payments landscape is going from a bank-only thing to a much more open industry,” says Treacher. “where a great deal of innovation is happening in the pure play payment fintechs.

“But we very much haven’t left the banks – they’re still very important as they ultimately carry the bulk of the traffic. We’re very much in play with banks but taking it much wider,” he says.

It is not as easy to suggest that banks haven’t been innovating in the space or the ones responsible for holding back progress, believes Treacher.

“The banks themselves are moving quickly – much more quickly responding to this change,” says Treacher. “Unlike legacy providers like SWIFT, our view is that payments is not the preserve of the banking world, but much broader and the payment companies we’re working with are the most dynamic in the industry; that’s where we get ideas and innovation.

“We very much haven’t left the banks – they’re still very important as they ultimately carry the bulk of the traffic. We’re very much in play with banks but taking it much wider,” he says.

According to Treacher, change in the payments sector is imminent.

“The real shift will be with the exponential growth among the unbanked and financially excluded,” says Treacher, “you can’t support that world with legacy payment flows.

“[SWIFT’s] gpi is a tracking system that relies on banks improving their service level agreements to pay out more quickly because it’s more visible because it is tracked. That’s still very centralised and very much a banking network which is very hard for corporates to use,” he says.

A SWIFT spokesperson said by email that it was the banks’ onus to improve customer service, by adding overlay services to “cater to specific client needs and distinguish their services from others.”

Daumantas Dvilinkas, CEO of Ripple-partnered startup TransferGo, believes Swift was not designed for a globalised world, and particularly the needs of economic migrants.

“The whole process of correspondent banking is fundamentally not designed for the current needs of the customer,” says Dvilinskas, “so yes, of course you can improve old school technology, but it’s a foundational issue.

“That’s where Ripple’s value comes in as a messaging platform between us and our partner banks, they do not own the bank accounts everywhere, they just provide the connectivity between different networks. We provide the end point connectivity,” he says.

When asked if SWIFT had plans to reduce the fees for P2P and SME customers, a spokesperson responded by email: “With gpi, banks are sending and receiving funds quickly and securely, anywhere in the world, with transparency on fees and where a payment is at any given moment.”

“We’ve found that TransferGo not only offers us a smoother, more reliable service than other providers – it has the most competitive rates available. Where we’d once have made payments directly through our bank, we now only use TransferGo,” said the owner of the Romanian SME, Gym House, Cristian Mechiu, by email.

Mechiu added that the ability to make batch payments to multiple suppliers and the speed of payment helped bring in stock on demand.

“The cost saving, and the speed at which we need to make payments across borders – both really important to our bottom line – are why we use TransferGo over traditional means,” said Mechiu.

“SWIFT message prices are negligible; over the past seven years, SWIFT has reduced average message prices by more than 60%, passing the benefits of increased volume back to the community,” they said.

The spokesperson also highlighted that on average, 40% of gpi payments are credited to end beneficiaries within five minutes, while half are credited within 30 minutes, three quarters within six hours and almost 100% within 24 hours.

While TransferGo recently announced their one millionth customer, it is a drop in the water for the ambitions of Ripple, says Treacher, who also highlights the surge in SME demand for cross-border payments services.

“A lot of banks we’re working with are increasingly becoming aware of that and we’re seeing an acceleration in bank engagement with Ripple,” says Treacher. “Most banks are focused a lot now on the SME space and think it is a really valuable place to play.

“Even the biggest banks within the retail part of the commercial banking division, they’ve been focused on providing services to customers. The SWIFT model is badly suited to those services – costly, slow and cumbersome,” he says.

If Ripple’s traction with banks is hindered by gpi, another option to extend operations into emerging markets would be to integrate into the existing established fintech giants, with “Ripple technology embedded into other providers” according to Treacher.