Ripple Accused Of Making False Claims About SWIFT’s Error Rate

San Francisco-based blockchain FinTech Ripple is being questioned about its claims that rival cross-border payments firm SWIFT has a 6 percent error rate, AMBCrypto reported Tuesday (Nov. 5).

Banking consultant Martin Walker, director of Banking and Finance at the Center for Evidence-Based Management, said in a paper produced for the London School of Economics, that he questions the repeated claims by Ripple executives of a 6 percent failure rate for SWIFT messages.

Ripple reportedly based its claims on a 2014 paper published by the SWIFT Institute but authored by two independent payments experts, Kimmo Soramäki and Samantha Cook. The error rate projected by the authors referred to the accuracy of the model, not the rate of errors in messages.

“In other words, the ‘6 percent error rate’ was totally irrelevant,” Walker said. “All of … Ripple’s commentary on the error rate and what it meant was also, as a consequence, completely erroneous.”

Walker has questioned Ripple CEO Brad Garlinghouse about the allegations regarding SWIFT’s error rate. Garlinghouse has highlighted SWIFT’s error rate on a number of occasions, including at the Money 20/20 Asia conference in 2018.

“The creation of the payment instructions by sending banks and the processing of those instructions by banks’ receiving the SWIFT message is only as good as the banks themselves,” Walker said. “While SWIFT was only acting as a network for the communication of messages, it did not have any view how efficient or effective the processes in the banks and other financial institutions were.”

SWIFT — Society for Worldwide Interbank Financial Telecommunication — was founded in Brussels in 1973 to establish common processes and standards for financial transactions.

Ripple has continued to add to its cross-border payments roster. In May, Ria Money Transfer, billed as the second-largest money transfer portal, linked with Ripple to offer instant money transfers.

Also in May, Maybank said it had become the first bank in Malaysia to deploy the SWIFT global payments innovation (GPI) service that is tied to speeding and streamlining cross-border payments. The bank joined 160 financial institutions across 200 countries.