According to the research by investment bank Credit Suisse, the “most meaningful” medium-term use for crypto payment platforms is cross-border B2B.
These payment solutions have the potential to reduce settlement times significantly, from days to just seconds and provide savings.
Cross-border B2B payments is an “actual pain point,” a problem that needs to be solved and San Francisco-based startup Ripple is one of the companies working on it,the report said.
Besides Ripple, JP Morgan is using its USD backed stablecoin, JPM Coin for B2B payments, securities transactions, and treasury applications. IBM is another one that has IBM World Wire cross-border solution using Stellar protocol.
R3 is also offering Corda Settler which supports XRP but is intended to assist multiple options. It has partnered with SWIFT on standards and Global Payments Innovation for Swift gpi.
However, the report said cryptocurrencies are “unlikely to gain C2B payments adoption at least for the medium term.” This is because they will be challenged to make a meaningful impact on the existing consumer payments (C2B) ecosystem over the near to medium term.
These challenges include lack of chargeback & dispute process, taxation, regulatory uncertainty, price volatility, lack of merchant and consumer adoption, transaction costs, no credit extension mechanism, vast number of coins, and speed.
The report from late January 2020 also mentions that the international money transfer service provider, Western Union is currently testing and considering using Ripple (XRP).
“Western Union: Testing and considering the use of Ripple (XRP) for cross-border (Ripple has made a $50mm investment in Western Union competitor, MoneyGram)”.
However, it is not clear if XRP as a digital currency is used here as it is nowhere explicitly mentioned. Also, only a handful of Rippe’s 300 customers are actually using XRP.
Recently, as we reported, it was revealed that Ripple is paying its partners compensation for the use of its digital currency.
MoneyGram is one such big partner. Ripple made a $50 million investment in the company and is in a two-year agreement to use XRP via On-Demand Liquidity (ODL). The report stated, MoneyGram hopes to improve its working capital, reducing the need for funds in foreign banks, through this partnership.
Transferwise, another Ripple partner is evaluating various technologies but “have yet to find a solution that enables them to improve on their current speed, costs, etc.”