American Express Opens First Blockchain Corridor With Ripple Tech

American Express just had its "Charles Lindbergh moment," using Ripple's blockchain to connect Santander clients in Europe and the U.S.

AccessTimeIconNov 16, 2017 at 1:00 p.m. UTC
Updated Sep 13, 2021 at 7:10 a.m. UTC

Back in 1927, pilot Charles Lindbergh could have flown cash across the Atlantic Ocean faster than most payments happen over that same body of water today.

Whereas Lindbergh completed his historic solo flight from New York City to Paris in 33 hours and 30 minutes, a typical bank transaction today takes one to two days using Swift, and a typical ACH transaction can take twice as long.

So, the news today that American Express has opened up a payments corridor using Ripple that can send money from England to the U.S. in just a few seconds has been a long time coming.

A partnership with Spanish bank Santander, the new corridor is being positioned by Ripple's global head of strategic accounts, Marcus Treacher, as an obviously faster, but also safer way to send payments across the Atlantic.

A former Swift board member, Treacher told CoinDesk:

"Whereas beforehand Amex had to send Swift messaging to the banks to request the payment to happen, now Amex is connected directly to the banks using Ripple and Ripple's cryptography, so that the movement of value happens immediately."

Run by American Express's foreign exchange international payments (FXIP) business, the corridor connects Amex customers in the U.S. using U.S. dollars to Santander bank accounts in the UK using British pounds – all via Ripple's blockchain, RippleNet.

According to Treacher, the integration routes non-card payments through the shared payment network for nearly instant, auditable cross-border payments.

Direct connections

The project marks the latest development for Amex in a year that has seen the credit giant join the Hyperledger blockchain consortium and partner with the bitcoin app provider Abra.

And for Ripple, which is coming off its recent Swell conference, the new work is another step toward letting its blockchain platform, tested throughout the first half of 2016, fly free.

For example, Ripple recently connected Europe and the U.S. via its work with Swedish bank SEB, which late last year revealed its intentions to connect Stockholm with New York City using Ripple.

Treacher said the SEB platform has already conducted $630 million-worth of transactions since it launched into production in Q2 of this year.

While that project is advancing and is able to transact in nine seconds or less, according to Treacher, it is for now — like the American Express project — restricted to what he calls a "pure" blockchain that doesn't require a cryptocurrency.

What both these projects have in common is "a direct connection," he said. "There's no intermediary cryptocurrency."

Crypto on board

Going forward, however, Treacher expects that other banks will increasingly follow in the footsteps of financial services firm Cuallix, which last month became the first Ripple partner to convert cross-border fund transfers into the blockchain's native XRP token.

Instead of holding dozens of what Treacher called "exotic currencies" in so-called nostro accounts around the world, Cuallix took the first step toward freeing up those funds otherwise trapped for new uses by holding the XRP itself.

With Ripple's main competitor, Swift building its own blockchain using Hyperledger, and a rising tide of upstarts with their own variations on the cross-border payments use case, it's this use of Ripple's native cryptocurrency that Treacher thinks will elevate the company above the competition.

"Where these two come together is that as banks and users of banks, like American Express, adopt Ripple and start to connect up, XRP becomes an option they can use for liquidity purposes," he said, concluding:

"And that's where it really comes to life."

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple. 

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