The race for dominance in the cross-border payment industry is heating up, with companies like Ripple, Stellar, Swift, and Cardano vying for the top spot. According to reports, this industry has already grown by $25 trillion to reach $150 trillion between 2018 and 2022. Experts predict that it will continue to expand and could reach $250 trillion by 2027.
The battle for supremacy in this industry has led to an influx of innovations from companies like Stellar, Ripple, Cardano, Hedera, Swift, and FedNow. These companies are doubling down on their efforts to stay ahead of the competition. One report suggests that the investments directed towards trade and infrastructure projects, such as the African Continental Free Trade Area and China’s Belt and Road Initiative, have contributed to the rapid growth of this industry.
Despite the competition, Swift still remains a popular choice for cross-border transactions, according to a survey of 4,000 consumers and SMEs. Tanja Haase, Head of Swift Go, believes that banks are still the preferred avenue for these transactions.
Swift has also made significant strides in the industry with its Central Bank Digital Currency (CBDC) interoperability experiment. More than 30 financial institutions have tested this solution, and it has now entered an advanced stage. Three central banks and monetary authorities, including the Hong Kong Monetary Authority and the National Bank of Kazakhstan, have integrated the solution into their infrastructure for direct testing.
However, Swift faces tough competition from Ripple and Stellar Lumens. Ripple recently announced a partnership with Amazon to integrate its XRP token into the e-commerce giant’s payment operations. Experts believe that the increased use of XRP in cross-border payments could drive the token’s price up to $500 by 2027. Stellar, on the other hand, stands out for its focus on faster and cost-effective transactions, thanks to its interoperability with other blockchains and traditional financial infrastructure.
Another noteworthy player in the industry is Hedera, a blockchain project known for its fast settlement times and high transaction capacity. Hedera can process up to 10,000 transactions per second, with transaction fees costing less than 1¢ USD.
In addition to these companies, FedNow, an instant payment system launched by the US Federal Reserve in 2023, is also making waves in the industry. Since its launch, 35 banks and credit unions have announced their support for FedNow, along with the Treasury Department’s Bureau of Fiscal Service. While participation in FedNow is optional, it is available to over 10,000 US financial institutions and is the first real-time payment system in the country.
In conclusion, the cross-border payment industry is experiencing rapid growth and intense competition. Companies like Ripple, Stellar, Swift, and Cardano are at the forefront of this race for dominance, with each offering unique innovations and solutions. As the industry continues to expand, it is expected to reach $250 trillion by 2027.