LFP164 – A Deep Dive Into Ripplenet, A Key 21stC Global Payments Approach, with Marcus Treacher SVP Customer Success Ripple

Payments are being revolutionised. One of the most fascinating examples is Ripplenet – Ripple’s approach to inverting the old model of slow large payments to super-fast, immediate, small payments (the general trend) which will change payments forever. Ripplenet “an internet of value” is used by over 300 Financial Institutions in more than 45 countries, as a next gen global payments infrastructure.

 Marcus has over 30 years of experience in transaction banking and payment technology, including 12 years at HSBC, being a member of the Global Board of SWIFT and an independent non-executive director of CHAPS Co, the UK’s RTGS clearing company.

In this show we start with the super-big picture of how payments have changed over the centuries, how the challenge is not simply tech but how people and organisations relate to this before spiraling in to a schematic overview of the three layers than amount to Ripple’s solution.

  • the lottery that is organising foreign holidays from the UK these days
  • Scotland being bigger than it looks
  • the UK leading the world in chaos as well as Fintech
  • bring live grouse to your Xmas party and you can entertain up to 30 people
  • the benefit of booking holidays via credit cards – so much easier to get ones money back
  • Marcus career history and journey through tech (including Cobol…), payments and consultancy
  • how the change in globalising society as well as the internet has led to different use cases from the 18th/19thC use cases which essentially were the concept behind oldskool payments mechanisms
  • cross-border payments are very difficult as the systems were built for times when they were rare
  • the first companies in the 16th/17thC and how they handled global payments – the first iteration
  • London money markets started with the need to source the global currency of the time Spanish Riyals which were widely accepted as a store of value
  • comparison of internet technology (IP) with where payments need to get to – a protocol of value
  • how human society and its stories (inc laws/regulations) always lag behind changes in technology
  • dopamine and getting tough things done
  • tech gets faster but in WFH mode the people go slower due to no physical adjacency and everything having a large overhead of organisation
  • Ripple’s customer base
  • Ripple moves billions of dollars using digital assets and direct connectivity
  • “The big challenge in getting the next generation of payments right is to take people with you, take the ecosystem with you.”
  • how many of their competitors of theirs failed
  • islands of payments and interconnectivity
  • cf computers pre internet – nothing to connect them
  • “creating an internet of money, an internet of value” – will enable the financial world to catch up with the information world
  • “that’s what we did … I genuinely believe Ripple is different”
  • blockchain as confusing terminology used to mean different things to different people
  • Ripplenet as three layers:
    1. The Scheme
      • a set of rules and regulations to determine standards, duties and responsibilities of members
      • as an example I got my holiday refund due to Mastercard’s scheme – not due to how it transfers money
      • started about 4yrs ago
      • a rethink of how to operate an open network (payments players can join – not closed to certain players only)
    2. Interconnecting ledgers
      • provider buys Ripple software and connects directly to each other cryptographically
      • payments exchanged between each two via simultaneous updating of their own private ledgers
      • ILP – inter-ledger protocol
      • Ripple do a few million such transactions per annum and are growing 10x per annum
      • infinitely scalable and “doesn’t cook the planet” (none of this everyone recomputing all transactions which doesn’t scale – with ILP your effort is linearly proportional to the number of transactions)
    3. Liquidity provision
      • a huge expense/hassle in current systems (as one needs a “float” or to fund while money slowly moving from A to B)
      • a much more classic blockchain – using consensus methods to keep it current which is far more efficient than proof of work
      • SWIFT uses different messages for moving payments and moving funding – similar parallel protocols within Ripplenet
      • runs on digital assets – XRP
      • so far delivered $2bn of liquidity into Mexico and Philippines with this approach
      • now only need to keep the currency in your own base – automatic translation at the point of swapping – no need to hold the other currency
      • “this transforms liquidity” – “on demand liquidity”
      • customer challenges with old systems in transferring money fast enough – Ripplenet obviates all that
  • what Ripple are looking for right now and the advantages for senders and receivers – take out huge amounts of costs

And much much more 🙂

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