BNP Paribas, a French international banking group with nearly $2 trillion in total assets, and Capgemini, a Paris-based multinational professional services and consulting firm, recently published the “World Payments Report 2018” in which they noted that “it will take more than bank-led initiatives to grow the new payments landscape.”
According to the report’s findings, regulatory authorities, “public-sector organizations”, and the third-parties involved in processing transactions represent the “broader financial services community”. The participation, and the emerging new roles, of these entities in the evolving global financial system is just as important as that of central banks and other financial institutions, according to the report.
BNP Paribas and Capgemini’s study and survey of the payments industry determined that “large payments users” require more reliable and cost-effective financial services such as “cash aggregation”, “cash [flow] forecasting”, and “automated treasury” solutions.
Banks Collaborating With Fintechs
Although the report did not specifically mention cryptocurrencies, and their potential role in helping to improve the payments industry, it did note that “new revenue streams” could be created if banks collaborate with fintechs and the broader financial services community.
As CryptoGlobe covered on October 14th, it appears that the demand for the XRP cryptocurrency, which has been developed by Ripple Labs Inc., a San Francisco-based fintech firm, is increasing. This, based on results from a survey by Wirex - which showed that approximately 75% of respondents preferred using XRP to make everyday purchases, instead of other major cryptocurrencies such as bitcoin, ethereum, and litecoin.
Ripple also recently announced the launch of xRapid, which is an XRP-based cross-border payments solution that is now increasingly being piloted by major financial institutions throughout the world.
Other key findings from the world payments report revealed that 74.1 percent of executives surveyed from large organizations believe the world’s “real-time payments infrastructure [is] being inhibited by lack of interoperability.”
"Lack Of Interoperability", Inability To Scale
Meanwhile, 59.3 percent of executives said that “weak data” and the absence of “authorization standardization” in transaction settlement systems is also preventing, or restricting, the growth and development of the global payments infrastructure.
Interestingly, 85.9 percent of executives criticized blockchain, as they think the “lack of interoperability” of distributed ledger technology (DLT) makes it unsuitable for managing payments systems.
Significantly, 83.1 percent of executives said that “lack of regulatory clarity” was a major factor that has limited the adoption of blockchain-based payments systems. Current challenges such as the inability of DLT-based transaction solutions to effectively scale have also prevented them from achieving mainstream adoption, according to survey respondents.