Fintechs top banks and stablecoins for cheap cross-border payment - BIS research
Research from the Bank for International Settlements (BIS) reveals that fintechs like Wise and Remitly have successfully reduced the costs associated with cross-border payments compared to traditional bank transfers. Despite the emergence of stablecoins as a potential alternative, they continue to struggle with operational friction that hampers their competitiveness in this space.
The findings highlight a significant shift in the cross-border payments landscape, with fintech providers offering cheaper and more efficient solutions than conventional banking methods. The ongoing friction faced by stablecoin payments suggests that while they hold promise, they have not yet achieved the reliability needed to become mainstream in this sector.
Key takeaways
- ▸Fintech firms Wise and Remitly offer significantly lower cross-border payment costs than traditional banks.
- ▸Stablecoins are experiencing friction issues that hinder their effectiveness in the payment landscape.
- ▸The research underscores the competitive pressure fintechs are placing on conventional banking services.
- ▸There is a continuing trend of fintechs capturing market share in money transfer services over traditional banks.
Why this matters
The findings are critical as they illustrate a clear competitive advantage for fintechs in the cross-border payments space, potentially accelerating the shift away from banks for international remittances. Consumers and small businesses may benefit from lower fees and faster transactions, while banks risk losing relevance if they do not innovate or improve their offerings. Stablecoins, while promising, need significant advancements in usability and efficiency to compete effectively in this growing market.
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