Tech money transfers get up to speed

BRITISH financial technology group Rtgs.global has developed a system with Microsoft that can securely transfer $1trillion (£723.5billion) from an account in New York to Sydney in 15 milliseconds.

Founder Nick Ogden, who also founded global payments giant Worldpay and Clearbank, said that the technology developed by RTGS and Microsoft will eliminate the friction or delays in the system that the World Bank believes cost the global economy trillions of dollars a year.

He said that RTGS’ cutting edge technology enables “atomic settlement” for commercial and central banks, meaning huge transactions can be confirmed instantaneously.

The system shows banks, central banks and regulators who has what funds where and in real time. Once a transaction has been agreed, the funds are locked and moved instantly. He explained: “One of the main reasons for delays is, how do you know the other bank has the money? So we came up with the idea of using central bank liquidity. It’s like when you pre-authorise a credit card when you book into a hotel. The logic is the same: we thought why not apply that to central banks and the accounts commercial banks have with them?”

He claimed that if the system had been in place in 2008, the world would have emerged from the global financial crisis with far less damage.

RGTS is working with a number of banks and Ogden added: “We are using virtual foreign exchange at the moment. We have a view to market roll out by the back end of the year or in early 2022.”0