Ripple's biggest goal is to allow customers to make cross-border payments. Even while XRP's price slid 90 percent from its peak a year ago, Ripple says it was signing up an average two customers per week last year as it attempted to break into a legacy software and network business that hasn't changed much in 45 years.
On Tuesday, Ripple announced it hit the 200-customer milestone, a 350 percent increase in customers sending live payments. It is now operating in more than 40 countries. Still, it has a long way to go before making a dent in global payments, which is dominated by the world's biggest banks.
SWIFT, an acronym for the Belgium-based Society of Worldwide InterBank Financial Telecommunications, was established by banks in 1973 as a new way to communicate about cross-border payments, and the messaging system remains the go-to network for more than 10,000 member institutions.
Money transmittal between countries can take several days, especially if intermediaries called correspondent banks get involved. Ripple wants to shorten the process to a matter of seconds using something similar to blockchain — the distributed ledger technology that underpins bitcoin and is being tested by companies from Amazon to J.P. Morgan.
Much like public blockchains, Ripple's network uses advanced cryptography to make sure transactions are secure. But all parties on the system do not have access to a shared ledger. Unlike cryptocurrency transactions, it can only be seen by those with permission to the network and transactions are not completely anonymous.
Even getting a crumb of Swift's business could be a significant win. Global payments ballooned to $1.9 trillion in 2017 and are forecast to grow to $2 trillion by 2020, according to an October report by McKinsey. Philip Bruno, a partner at McKinsey and co-lead of its global payments practice, said mobile telecommunications have raised expectations for how quickly money is transferred from one place to another.
"We've been able to make much faster same day payments domestically with mobile banking," Bruno said. "There's now this expectation that if I can pay my brother or my cousin immediately, when I get to work why can't I do the same thing to pay my global supplier?"
Banks aren't going to let go of their dominance in cross-border payments that easily. Swift has a global payment initiative to speed the flow of information, and HSBC is among the partner banks testing Swift's version and blockchain for payments. But as far as is known, not Ripple's. The bank's head of innovation Jeremy Balkin told CNBC that global banks "have a huge competitive advantage" when it comes to cross-border payments since they have branches and banking relationships across the world.
Global banks like Citi make "an automatic $8 billion on cross-border payments," Ripple's Garlinghouse acknowledged. "I think Citi will be the last customer we ever sign up because it has the highest vested interest in not changing the status quo."