World Payments Report: Over 85% of Executives Think DLT is Unsuitable for Financial Transactions

  • BNP Paribas and Capgemini's "World Payments Report" reveals that participation of regulators, public-sector organizations, and third-parties are important in helping to improve the global payments industry.
  • Most executives surveyed don't think distributed ledger technology (DLT) can work effectively in helping to improve payments processing.

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.

Switzerland's Largest Online Retailer is Now Accepting Cryptocurrency Payments

Digitec-Galaxus, Switzerland’s largest online retail company, has reportedly decided to start accepting bitcoin (BTC) payments.

Digitec and Galaxus customers can now pay for goods and services with bitcoin and a few other major cryptocurrencies. In addition to BTC, users can make payments in XRP, ETH, Litecoin (LTC), Tron (TRX), OmiseGo (OMG), and NEO.

Digitec and Galaxus’ online retail outlets will also be taking payments in Bitcoin “Satoshi Vision” SV (BSV), Bitcoin Cash (BCH), and Binance Coin (BNB). Commenting on the Swiss retailer’s decision to start accepting cryptos, Oliver Herren, the co-founder and CEO of Digitec, remarked: 

Cryptocurrencies are fascinating and could become a relevant means of payment in e-commerce. We would like to support this development. We wanted to do that for a long time.

Coinify Will Help Convert Crypto Transfers To Swiss Francs

Herren added that Digitec decided to take cryptocurrencies as payment because people may have invested in them and they may want to use them. “Or because you cannot turn them into real money [since] your bank does not accept it. Or maybe just because you ...  like to try new things,” Herren said.

According to Switzerland’s e-commerce giant, it wants to encourage millennials, who may be heavily invested in the blockchain space, to start using cryptocurrencies for practical purposes such as paying for everyday goods and services. Price volatility of cryptocurrencies may not be an issue as Digitec and Galaxus will immediately convert crypto payments to Swiss francs using Coinify’s services, a third-party payment processor.

At present, crypto payments are only available for Switzerland-based users, however the company has said that it might allow customers in other areas to pay with crypto if their initial effort is successful.

Danish Food Takeaway Outlet Accepts Bitcoin Payments For Its 1500 Restaurants

In December 2018, Hungry.dk, one of the largest online food portals in Denmark, started accepting Bitcoin again. The food takeaway company handles orders from more than 1,500 restaurants in Denmark and had been accepting BTC payments since 2014. However, it had decided to stop taking crypto payments in late 2017 due to very long transaction processing times.

A representative from Hungry.dk noted (last year): 

We have accepted Bitcoins as a payment method for quite some time. We decided to remove the feature temporarily last year though because the average transaction time took too long, and the experience wasn’t the best.