The race for dominance in the cross-border payment industry is heating up as Ripple, Stellar, Swift, and other players compete for a share of the market. According to a report, the industry grew by $25 trillion to reach over $150 trillion between 2018 and 2022, which is almost the size of the entire global technology industry in 2023. Experts predict that the industry will continue to grow and reach $250 trillion by 2027. This growth is attributed to investments in trade and infrastructure projects such as the African Continental Free Trade Area and China’s Belt and Road Initiative, which contribute to 10% of the annual growth in cross-border payments from emerging economies.
Despite the competition, Swift remains a popular choice for cross-border transactions, according to a survey of 4,000 consumers and SMEs. Swift has recently made efforts to lead the industry, including its Central Bank Digital Currency (CBDC) interoperability experiment, which has attracted over 30 financial institutions. The beta solution has advanced to the stage where three central banks and monetary authorities, including the Hong Kong Monetary Authority and the National Bank of Kazakhstan, are integrating the solution with their infrastructure for testing.
While Swift aims to dominate the industry, it also recognizes the need for coexistence with other payment systems. It faces tough competition from Ripple and Stellar Lumens, with Ripple announcing a partnership with Amazon to integrate XRP into its payment operations. Experts believe that this move could drive the price of XRP to $500 by 2027. Stellar, on the other hand, stands out for its interoperability, allowing it to connect with other blockchains and traditional financial infrastructure through regulated financial institutions called anchors.
Hedera, a fast-rising blockchain platform, offers immediate settlement time and can handle 10,000 transactions per second at a cost of less than 1¢ USD per transaction. Another notable player in the industry is FedNow, the instant payment system launched by the US Federal Reserve in 2023. Since its launch, 35 banks and credit unions, as well as the Treasury Department’s Bureau of Fiscal Service, have announced their support for FedNow. While participation is optional, the service is available to over 10,000 US financial institutions, making it the first real-time payment system in the country.
In summary, the cross-border payment industry is experiencing rapid growth and intense competition among players such as Ripple, Stellar, Swift, and others. The industry is expected to reach $250 trillion by 2027, driven by investments in trade and infrastructure projects. Swift remains a popular choice for cross-border transactions, but it faces strong competition from Ripple and Stellar. Other notable players in the industry include Hedera and FedNow, which offer fast and cost-effective payment solutions.