When you think of cross border payment solutions, there are two key projects that should spring to mind with regards to cryptocurrency and blockchain technology. Ripple and Stellar, with their respective currencies XRP and XLM.
Both are designed to tackle problems with cross border payments, but only one will find the true, universal solution, right?
Is the race truly on?
Not yet, both of these projects are working on established technologies that now have a number of large partnerships (namely Ripple and Santander vs Stellar and IBM) but even so, it’s hard to actually see a finish line in this race, therefore it can be assumed that there is a lot of work to be done by both parties before cross border payment dominance can be achieved.
The story so far
Let’s take a little look at the history and progression of Ripple and Stellar as without knowing this, it would be impossible to gauge their future prospects.
Ripple is the team behind RippleNet, the network designed to facilitate an enterprise blockchain for global payments. Ripple want to make the world a smaller place by making cross border payments faster and cheaper. According to the Ripple website:
“In a world where three billion people are connected online, cars drive themselves and appliances can communicate, global payments are still stuck in the disco era. Why? The payment infrastructure was built before the Internet with few updates.”
Ripple’s cross border payment solutions are being picked up by banks and as it stands, Ripple have already made a number of partnerships that are sure to give them a headstart in the race for cross border payment dominance, such partnerships include Santander, American Express, Standard Chartered, MoneyGram and SBI Holdings.
The payment solutions come in the form of three separate technologies, xCurrent, xRapid and xVia, though these are separate, Ripple are set to establish a new all in one package called Convergence, which will allow companies to access all of Ripple’s solutions in one easy to use package.
According to Ripple:
“Today the world sends more than $155 trillion* across borders. Yet, the underlying infrastructure is dated and flawed. Ripple connects banks, payment providers and digital asset exchanges via RippleNet to provide one frictionless experience to send money globally.”
Whilst we can argue that the race isn’t on just yet, it’s pretty clear that Ripple are going to be in poll position when the grid opens up. Let’s remember though, Ripple do have viable and dangerous competition in Stellar.
“Move Money Across Borders Quickly, Reliably, And For Fractions Of A Penny. Stellar is a platform that connects banks, payments systems, and people. Integrate to move money quickly, reliably, and at almost no cost.”
The goal for Stellar almost identical to Ripple’s goal, they want to make cross border payments better, faster and cheaper, though I get the feeling there is a difference in the pairs target audiences. Indeed, Ripple seem focused on industry, banks and institutions. Stellar on the other hand seem to offer a friendlier and more personalised service, one that is aimed at individual users.
Looking through the Stellar mandate however gives us a better idea of what Stellar are aiming to achieve:
“The mission of the Stellar Development Foundation (SDF) is to promote global financial access, literacy, and inclusion. SDF accomplishes this by expanding worldwide access to low-cost financial services through the development and maintenance of technology and partnerships. SDF’s vision is an open and affordable financial system where people of all income levels can access simple-to-use, secure, and low cost financial services. SDF also aims to empower developers with useful technology to create financial products and services for their communities.”
The key thing to note here, is SDF being open to people of all income levels. Stellar is a project for the many and not the few, this is going to give Stellar a huge boost in the race for cross border payment dominance.
In terms of partnerships, Stellar are most well known alongside IBM and indeed, this is a very big deal, however compared to Ripple, Stellar don’t have such a big presence within the mainstream banking industry.
Who’s going to win this one?
Actually, we could argue that Ripple and Stellar aren’t in direct competition. Though their goals are the same, their paths and their target audience are indeed very different. There’s no reason we can’t live in a world where institutions are using RippleNet to facilitate cross border payments and there’s no reason that in the same world, we, as normal people can’t be transferring money internationally using Stellar’s technology. So actually, when we see these online comment fights erupt online between the Ripple and Stellar communities, maybe we need to step back and see that actually, both companies are now in a very good position from which they can achieve a common goal, but along the way, will be able to help and assist different types of people.
Ripple and Stellar are going to change the way we transfer money internationally. Not as separate rivals, but as two projects with a common goal. They aren’t working together directly but we could expect their paths to cross one day.