The cross-border payments market continues to grow with increasing international commerce, migration, and changing economic trends. Currently, financial institutions like banks have significant dominance in cross-border payments with a market share of 95 percent. However, their payment transfers and services lack transparency, attract high fees, and lead to delays. These long-standing obstacles can be overcome with blockchain technologies like Ripple. Ripple provides cutting-edge mechanisms for customer-centric and innovative payment services. It aims to change the current payment landscape entirely by overcoming traditional pain points or even replacing the existing financial services system.
So, let’s take a look at how Ripple is giving tough competition to conventional competitors like Swift and Western Union in cross-border payments?
Challenges with Existing Cross-Border Payments
Legacy international payment systems are inefficient and complex. Their transactions involve multiple banks across different locations. In addition, there is a lack of transparency about fees and uncertainty on whether cross-border payments will even reach intended recipients.