Banks Drop International Payments Business to Blockchain
May 24, 2018 11:21 am,
Over the last year, banks have lost 40% of the market portion for consumer-to-consumer (C2C) cross-border expenses to non-banks. Statistics on consumer-to-business (C2B) and business-to-business (B2B) expenses also show that trades are going around financial institutions in order to have their international expenditures managed in a fast, safe, and cheaper way. Banks have lost 30% of the C2B expenses market and 5% of the B2B market.
Jinal Surti, Director of Business Operations at Ripple, the real-time gross payment system and transfer network based on circulated ledger technology, is appalled that banks at the annual BAFT Conference this month are okay with their legacy systems in spite of the interference in the space.
Non-banks are taking over an improved market share of international payments and are being capable to cater to a wider range of client outlines in an improved number of services.
TransferWise used to help consumers only and is currently offering services, with process batched payments, to small- to medium-enterprises (SMEs). The platform’s role has extended from being a cross-border payments service to a multi-currency account holder for trades and a deposit holder with its customers.
Non-bank organizations are showing banks are no longer vital as they become just a ‘utility’ in the system. The economy no longer wants liquidity services from banks to practice international payments as digital assets made it likely for small banks and non-banks to send money with no pre-funded destination liquidity.
Cryptocurrency is democratizing the global access to finance and liquidity while making a re-shuffle of the banking order. Excellence customer information will command the industry leaders in the trade as they compete with accessible, real-time, and on-demand substructure that decreases the marginal cost of a transaction, possibly to zero.
“The old-fashioned banking organization is failing and banks want to pay new technology today to continue competing. Because expenses are just the start. Losing payments leads to losing a lot more,” Ripple’s Surti added, as the company places itself as a payment solutions provider for the banking industry