This article in globalcoinreport.com argues that payment card networks have been unable to keep up with demand for cross border payments, justifies the argument using recent network failures by Mastercard and Visa, and then actually suggests Ripple is a better solution:
“With all these issues, we can see the shortcomings of the modern-day payment providers. One question that comes to the mind is, can these modern payment providers process high-volume global payments without glitches? It is safe to say that global commerce is advancing at a breakneck rate and these providers aren’t that scalable.
It’s astonishing that Visa had outage issues and so MasterCard too; seems like we are seeing a trend of these modern-day providers not being able to keep up with the ever-changing global commerce since they simply can’t keep up.
Nevertheless, Visa can perform 24,000 transactions per second, but Ripplecobalt can perform 30,000 to 50,000 operations per second. It is necessary to know that the world average of cash usage is at 75%, and this means that modern-day payment providers need to be faster and use better technologies – Rippletechnology offers more speed and reliability.
The blockchain technology, Ripple, is seen as the future of global money transfer and it has been designed to process the transfer of funds. Rippleis now used by more than 100 banks and credit companies across the world today.
With Ripple, it is more than possible to perform cross-border payments without restrictions or glitches. So, it won’t be wrong to say that both Mastercard and Visa will need Ripple (XRP)technology if they wish to cope their global payments efficiently and scale their volumes at the very best level possible.”
I have great expectations for Ripple and Blockchains in the long term but these solutions have so little usage and remain so limited in geographic coverage, that it is impossible to prove they would be more reliable. Building a high performance and reliable network that leverages the internet infrastructure remains an extremely challenging design effort and it is likely any reliance on the open internet will expose the operation to the risk of brownouts and outages – and as we know payment networks are the targets of choice.
I don’t doubt that Blockchain has a place in payment networks but I do question how crypto solutions will address the last mile. Ripple has properly positioned itself as the connection between banks and leaves connectivity to consumers to the existing bank operated solutions.
As of today no crypto solution has achieved anything like the large scale merchant and business acceptance footprints implemented by payment networks and operating and managing that last mile is a very different animal. The Ripple software and operations would need to be entirely re-architected to address the issues associated with supporting the existing regulatory and technological reality that encumbers that last mile.
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group
