The Clearing House and Wells Fargo Collaborating on SWIFT Replacement

Key Takeaway:

  • The Clearing House, a well-known Ripple partner, is collaborating with Wells Fargo on a cross-border payments system.
  • It is “particularly built to serve digital commerce” and may eventually replace SWIFT.

The Real-Time Payments (RTP) Service system would allow for the real-time transfer of digital money between qualifying Wells Fargo accounts. A new Wells Fargo online service agreement that describes how this effort could directly challenge SWIFT’s dominance has been released online:

The RTP Service was created “for the digital, on-the-go manner we live and work today,” according to the Clearing House. Unlike competing payment systems, the RTP system offers real-time postings, instant confirmation, and a secure two-way messaging service. Transfers would be immediate and final, giving account holders complete control, much like cash.

Despite The Clearing House indicating elsewhere that its system works under a $100,000 credit transfer limit, it appears that the RTP service will be severely limited at Wells Fargo, with a $5,000 single payment maximum. Wells Fargo also reserves the right to terminate, alter, or stop RTP service access at any time.

In the end, though, this is more evidence that digital currencies are slowly but steadily being adopted by traditional banking institutions. Major banks are realising the need for bespoke systems created specifically for improving the flow of trade in the digital economy. Despite initial reservations, Wells Fargo has stated that it will “retain the ability to add new accounts that are qualified” to the RTP Service.

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Shambhavi Soni

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