The CTO of Ripple, David Schwartz, attended the Money20/20 USA conference and participated in a debate with Esther Pigg, senior vice president of product strategy at FIS Payments. The debate, moderated by Tony Hayes, revolved around the traditional payment system and how blockchain technology could replace it. Schwartz presented his side of the argument, with a two-pronged approach to the question: how will blockchain replace today’s payment system?
The Global Payments System Is Primitive
In his answer to the question, Schwartz began by explaining the problem with the global payment system. He said that the system was created before the advent of the Internet — for the “postal and batch era.” Hence, it cannot address the demands of the current market. He talked about the problems in the financial industry as well, saying:
“We’ve been trying to put band-aids on the problem for years now. Apple Pay, SWIFT GPI, bank’s web and mobile interfaces — these are all just short-term fixes.”
He said that the band-aid solutions don’t fulfill the underlying issues with the infrastructure that supports the global payment system. They may not be ideal for the next wave of companies and consumers. Schwartz noted that the proliferation of several APIs that the companies need to execute payouts to customers and partners is becoming a “nightmare.” In emerging markets, businesses and consumers may not have enough options to address their payment needs.
Blockchain Is the Ideal Payment Solution
After counting the problems of the existing payment system, Schwartz then explained why blockchains could be helpful in creating a newer, faster, and more efficient payment network. He said that it is hard to curb technological advancement when it solves a problem. Blockchain is solving cross-border payment problems, and it could do the same for other use cases as well.
He noted that blockchain payments are ideal for cross-border transactions because of three factors — security, reliability, and governance. The self-defending systems of the immutable ledger provide security for transactions. He noted that the median blockchain’s reliability is better than YouTube as it has never experienced outages. Finally, blockchain has better governance as everyone participates in the enforcement of the rules of the system.
He concluded his opening remarks in the debate talking about what transition to blockchain might be like. He said:
“Look at what email did to postal mail. Look at what digital music did to CDs. And, if you look at the developing world, they skipped landlines completely. The same can be said for the developing world moving straight to mobile wallets.”
Pigg, on the other hand, rebutted his arguments focusing on regulatory uncertainty on blockchains and problems related to interoperability and scalability. Schwartz suggested that blockchain already has an interoperability protocol called InterLedger. However, he acknowledged that scalability can still be improved.
Ripple CTO David Schwartz Presents Strong Arguments Supporting Blockchain in Payments at Money20/20 USA was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.