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SWIFT announced the launch of a new retail payment solution on January 29, which will be launched in the first half of 2026, with 40 banks participating. Promising transparent fees, full payment, and status tracking, responding to Ripple’s criticism. However, the funds still go to the agent bank and do not touch the settlement layer. Ripple pilots blockchain settlement in Saudi Arabia, Switzerland, and Japan to reduce capital costs. SWIFT changed the interface, Ripple changed the underlying layer, and the two systems coexisted.
SWIFT acknowledges the three major pain points identified by Ripple
For years, Ripple has believed that cross-border payments have three major flaws. First, shippers rarely know the full cost in advance, and hidden intermediary fees and exchange rate losses often result in a much lower final payment than expected. Second, the payment process is slow and unpredictable, with standard cross-border transfers taking 3-5 business days, encountering weekends or holidays longer, and the status cannot be tracked during the process. Third, banks must pre-fund cross-border accounts, which will take up a lot of capital and reduce capital efficiency.
SWIFT’s new approach directly addresses the first two issues: transparency and predictability. Under the program, participating banks will commit to a strict set of rules. These rules include upfront disclosure of fees and foreign exchange rates, guaranteed full delivery, and providing end-to-end transparency into payment status. In simple terms, customers should know how much they will pay, how much the recipient will receive, and when the money will arrive before sending money.
This consistency is not accidental, as it shows that the pain points identified by Ripple do exist – even if SWIFT has chosen a different solution. SWIFT’s statement reflects the growing pressure to bridge this gap, which comes precisely from fintech companies and blockchain networks like Ripple, Wise, Revolut, and other competition. Over the past decade, these emerging platforms have eaten away at traditional banks’ cross-border payment market share with their transparent fees and fast arrivals.
Cross-border retail payments have become a weakness in the banking industry. Domestic payments in many countries now take seconds to settle, while international transfers still take days, go through multiple intermediaries, and often lose amounts in the process. Ripple, in particular, has long argued that the existing correspondent banking model is no longer sufficient for modern people. SWIFT finally acknowledged these issues in 2026 and introduced reform plans.
Three major promises of SWIFT’s new solution
Transparent fees: Customers can see the full fee details before remitting money, including intermediary bank fees and exchange differences
Full payment: Guarantees that the recipient will not miss the amount due to hidden deductions when receiving the remittance
Status tracking: Provides end-to-end payment progress query, similar to express tracking systems
These improvements will bring the user experience of SWIFT cross-border payments close to fintech platforms like Ripple or Wise. However, the key difference lies in the backend mode of operation.
SWIFT does not touch the settlement layer to protect the interests of banks
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(Source: SWIFT)
Despite the improvements, SWIFT’s model has not changed the way interbank funds are actually settled. Funds will still flow through the correspondent banking system, banks will still rely on pre-deposited foreign currency accounts, and capital will still be locked to support cross-border capital flows. This solution improves the payment experience for customers, but it does not change the way banks manage liquidity in the backend. This limitation defines the end point of the SWIFT solution.
The logic of the correspondent banking model is that when a Chinese bank needs to send money to a U.S. bank, if the two banks do not have a direct cooperative relationship, they need to transfer it through one or more intermediary banks (correspondent banks). Each correspondent bank charges a handling fee, and the entire process involves multiple account reconciliations and foreign exchange exchanges, which is the root cause of slow and expensive cross-border payments.
SWIFT’s new scheme requires banks to inform customers of these costs in advance, but it does not change the actual process for correspondent banks. Funds still need to go through multiple intermediaries, and banks still need to deposit foreign currency accounts (known as Nostro accounts) in multiple countries. It is estimated that global banks have locked up about $5 trillion in idle funds in Nostro accounts that cannot be used for lending or investment, causing a significant waste of capital.
This is precisely the core problem that Ripple’s XRP and RippleNet are trying to solve. Ripple’s solution is to use XRP as a bridge currency, and banks do not need to deposit foreign currency in each country, but instead complete exchanges and settlements through XRP in real time when needed. For example, a Japanese bank sending money to Mexico can convert yen into XRP (seconds), send XRP to Mexico (seconds), and XRP to Mexican pesos (seconds) in a process of no more than 1 minute without the need to pre-deposit a peso account.
SWIFT chose not to touch this settlement layer to protect the bank’s vested interests. If the $5 trillion in Nostro accounts is released using the Ripple model, the bank’s profits will drop significantly (because these funds can be used for high-yield investments or loans). What’s more, correspondent banks are an important source of revenue for large international banks, and reforming the settlement model will shake up the business models of these giants. As a bank-owned cooperative organization, SWIFT naturally does not challenge its own shareholder interests.
The Ripple pilot specializes in liquidity efficiency
Ripple’s recent partnership with banks has taken a different approach. Rather than focusing on messaging standards and rule enforcement, Ripple is looking at settlement mechanisms. It aims to reduce the need for prepaid accounts through blockchain-based payment rails and regulated stablecoins. Banks in regions such as Saudi Arabia, Switzerland, and Japan are testing this model in a controlled environment.
These pilot programs are not designed to replace the SWIFT system but rather to reduce the cost of capital for specific transaction channels. Ripple’s value proposition is primarily reflected in its balance sheet, not its interface. When banks can release billions of dollars in Nostro account funds that can generate additional yield or support business expansion, that’s what Ripple really sells.
This move by SWIFT has raised expectations across the industry, with transparency and delivery certainty becoming essential requirements today. This reduces Ripple’s ability to differentiate itself based solely on speed and visibility. At the same time, this does not eliminate the need for alternative settlement models. In capital-intensive or emerging market regions, the issue of liquidity efficiency remains open, which is why Ripple’s solutions continue to attract banks.
Overall, SWIFT does not adopt blockchain technology, does not integrate XRP, and does not abandon correspondent banking. Instead, it acknowledges the same structural issues that Ripple has been pointing out for years – while choosing to address them in a way that preserves existing systems. This is a “self-improvement” of the banking system, not a “revolutionary subversion”. For Ripple, SWIFT’s reform is both an acknowledgment and a challenge, and it must continue to innovate in liquidity efficiency to maintain its competitive edge.
