Two of Australia's "big four banks," Westpac Banking Corporation and the Australia and New Zealand Bank Group (ANZ), are trialing Ripple payments for faster and lower-cost cross-border payments.
Westpac, which is ahead of ANZ in its intention of integrating Ripple, said it is in the early stages of a proof-of-concept where staff members are testing the system by making small international payments to other countries.
Speaking with the Australian Financial Review, Rachel Slade, general manager of global transactional services at Westpac, said that Westpac has been satisfied by the experiment so far noting that integrating Ripple would allow the bank to transfer funds across the world in a faster and cheaper way.
"The solution we've developed is faster than other alternatives in the market today, providing same or next-day payment. This technology could be very beneficial to all Australians, providing a low-cost and fast method of sending low-value payments overseas."
Moreover, she added that the solution they have created would allow the bank to identify the payment originator of each transaction. This solution, she said, is consistent with bank's requirements to comply with anti-money laundering and "know your customer" rulings.
ANZ, on the other hand, has been in talks with Ripple Labs, the creator of the payment network, and is in the process of investigating the advantages of such a system for its clients, a spokesperson said.
Westpac and ANZ follow the lead of the Commonwealth Bank of Australia (CBA), which announced on May 29, its plan to integrate Ripple for distant settlements between its subsidiaries.
Speaking at the launch event of the Australian Information Industry Association, David Whiteind, CEO at CBA said the bank has been testing "crypto-protocols" in order "explore the benefits of intra-bank transfers using these protocols."
While three of Australia's "big four banks," are gauging the merits of the Ripple network for global transfers, they are still reluctant on adopting bitcoin, pointing out the lack of regulation and the risks associated with money laundering.
Westpac's Rachel Slade said her company is interested in new technology and is currently evaluating bitcoin and the blockchain. However, bitcoin remains a "watching brief," she said.
A spokeswoman for ANZ said the bank has been watching regulatory developments, and although ANZ is looking to offer the latest payment technologies, the banks needs to manage risk and comply with regulatory obligations.
"Regulators globally are currently reviewing bitcoin and other cryptocurrencies to better understand the technology and possible implications, and we would need to see the outcomes of any review before confirming future plans."
Ripple Labs, which announced its intention to expand to the Asia-Pacific region earlier this year, has set up a regional office in Sydney on April 6, in a response to the "growing demand for Ripple's real-time settlement protocol in the region."