Open Payment Protocols Open New Doors In Payment And Settlement Systems, Says Ripple’s David Schwartz
On a recent blog post for the Ripple “Insight” page on their website, David Schwartz wrote about the ways that open payment protocols are the first of many steps needed for changes in payment systems. His article opens with a discussion on the beginning of the internet, and how the current protocols in place have essentially formed it into the current source of information that it is now. Just to be operational and globally connected, some of the protocols and standards used have been the Internet Protocol, HTTP, and SMTP. Once established, these processes expanded to continue the growth of other advancements like streaming.
Every step that Ripple takes is meant to be another one towards the idea of the “Internet of Value,” and they are using the tried and true methods that have been used in the past for growth. The InterLedger Protocol, for example, is a protocol that is fairly similar to IP, but differs in the way it accepts payments from a variety of ledger systems. ILP was developed by both Schwartz and Stefan Thomas, though Thomas has since left Ripple to pursue his new company named Coil. Coil is still using ILP to help monetize content online.
Ripple has managed to use ILP for cross-border payments through xCurrent, which helps to preserve both the flexibility and privacy that Ripple’s partners favor. With instant transfers, it is easy to maintain that goal. In a statement by David Schwartz, he told the public,
“By connecting bank ledgers and existing infrastructure investments via ILP, banks are taking the first steps in improving global payments today — and in enabling a true Internet of Value.”
With the ever-rising fees from bankers, there is plenty of room for Ripple and other non-bank companies to make a profit. Schwartz’s idea is that platforms will need to allow for digital assets as their on-demand liquidity, which comes after the connection with the ledgers. Ripple is already solving this concern with xRapid, which is able to save users both in time and money when they transfer funds across the border.
These innovations will eventually be the foundation for growth in the industry for the next five decades, according to David Schwartz. To this sentiment, he commented,
“This starts with providing technology that the current financial structure is comfortable with: xCurrent, blockchain technology that provides cryptographically secure transactions across a dispersed network of ledgers and integrates easily with existing systems…In the same way that IP dug new plumbing for the Internet, revamping global payments must start at the bottom infrastructure layer and move up from here.”