When you think of cross border payments in cryptocurrency, two market leaders spring to mind, Ripple XRP and of course, Stellar XLM. The pair have been working very hard through 2019 to gain a reputation as the holders for the solution for all of the problems faced within contemporary cross border payment solutions, including high transfer fees and long transaction times. Indeed, both XRP and XLM hold different advantages and ideas when it comes to addressing these problems.
Which crypto will win the race?
We don’t believe that one crypto is better than the other and that in this instance we see that Ripple and Stellar are focusing on different ideas and demographics within the cross border payment space. As a result of this, both projects can co-exist as cross border payment solutions, giving customers variety and the option to decide which project they want to use when making payments abroad.
Is Crypto the answer?
We want to ask this - is crypto really the solution for cross border payments? As I have stated, the problems that exist in this arena at the moment are high transaction fees and long transaction times. In short, it costs a lot to send money abroad and often takes a lot of time. Companies such as Moneygram and Western Union have long been trying to improve this process, indeed other firms such as PayPal have been found to be carrying out similar innovations, but, can any of these solutions really move forward and improve without adopting XRP or XLM?
The likes of Western Union and Santander (as examples) have adopted blockchain technology, namely Ripple technology, however all these firms still continue to refuse to adopt the projects native cryptocurrencies, for fear of regulation discrepancies (the usual cryptocurrency adoption battle).
What this means is that yes, there is an answer for cross border payment problems within blockchain technology, the big players have recognised that, but, is there any advantage towards extending that technology into the tokens themselves? Do Santander see that using XRP as a currency within their OnePayFX app is advantageous for example?
Continuing with the OnePayFX example, using XRP would mean faster and cheaper payments, which in turn improves customer service and the use value of the service. So, to address the question again - yes, crypto is the answer.
The big dogs just don’t seem to have realised it just yet.
We hope to see the likes of XRP and XLM integrated within mainstream cross border payment services in the future. These services are sure to use blockchain technology as they expand, though the introduction of an actual cryptocurrency yet is uncertain. What we can however assume is that when it comes down to the crunch, it’ll either be XRP or XLM that these services need to choose from, that can only be a good thing.