- Ripple may have a hard time as banking and high-tech giants enter the market.
- The demand for the cross-border solutions is still low as the market is still in embryonic stage.
Ripple as a blockchain startup has been successful in promoting its cross-border payment solution with numerous partnership deals with such financial heavy weights as Banco Santander, Western Union, and UAE Exchange.
However, the company is not the only one in the space. It has to face a competition with other prominent and powerful players like JP Morgan Chase with its JPM Coin and IBM’s Blockchain World Wire. According to Forbes, IBM has a considerable market share in the blockchain industry as its Hyperledger Fabric is the most-used solution in the Forbes Blockchain 50 list.
All the above-mentioned solutions are focused on financial and enterprise institutions, offering them fast and cost-effective cross-border payment systems. Though, according to Elizabeth White from The White Company that provides cryptocurrency solutions for businesses and consumers, the modern banking system is not ready to accept the innovative solutions.
“Large intentional banks have been using systems like SWIFT for decades and have whole ‘wire departments’ dedicated to processing transactions. While blockchain would significantly modernize, automate, secure and speed up the whole process, it would require retraining and reworking a bank’s entire operations to implement,” she commented.
Moreover, they resist the innovations that might cut on the transaction fees.
“For many banks, moving to XRP, JPM Coin, or World Wire is just not worth it because their customers are not yet demanding the speed and low cost of blockchain transactions, and in fact banks are making a lot of revenue on wire fees and the like,” Elizabeth White explained.
While blockchain and a digital form of money is considered being the future, we still have a long journey lying ahead where the winner of competition between Ripple and similar projects will play a significant role.