Ripple has found a competitor in the payments space, with a platform known as we.trade. We.trade functions on Hyperledger Fabric and is an IBM blockchain-based cross-border money transfer platform that aims to improve the speed and efficiency of cross-border financial transactions.
The we.trade consortium is comprised of banks such as Deutsche Bank, HSBC, KBC, Natixis, Nordea, Rabobank, Santander, Societe General and UniCredit.
The platform utilizes smart contracts to make improvements to transparency for open account trade transactions. It signifies the first commercially viable open account trades using blockchain. Robert Mancone, the CEO of we.trade said:
“These transactions prove that we.trade is a robust and commercially viable proposition. The next step will be getting buy-in from additional banks and their customers in Europe and further afield.”
It is to be noted that the we.trade product is designed to handle the entire process of order-to-payment. This includes placing orders, selecting payment terms, executing contracts and the actual payment. The consortium is focusing on small and medium businesses, quoting the ability to scale them.
Omer Ahsan, the Head of Customer Propositions at HSBC illustrated a use case, saying:
“Last week three of our clients executed transactions using we.trade: Fluid Pumps used the platform to complete an open account transaction with a customer in Finland, GPS Food Group completed an intercompany transaction that included the use of a Bank Payment Undertaking and also executed two open account transactions with Paragon Quality Foods.”
However, the one thing that the we.trade product still does not have is a liquidity solution. Ripple provides on-demand liquidity for cross-border transactions, completely removing the need for pre-existing pools of liquidity.
Moreover, transactions using Ripple’s xRapid product are settled in minutes, with companies that undertook the pilot reporting up to 70% savings. Notably, SWIFT has also been quoted by companies as being a security vulnerability. Many banks have reported hacks through exploits in the SWIFT system.