Perspective: The Ripple Effect: The New Age of Transaction Infrastructure

Perspective: The Ripple Effect: The New Age of Transaction Infrastructure

IDC expects that payments through Ripple or similar protocols will grow exponentially in the years ahead. As such protocols supersede Bitcoin, the distinction between cryptocurrencies and new payment protocols will become clearer, and the banking industry will embrace the protocols. Thanks to the support of Ripple Labs and other interested parties, Ripple is currently best placed to take this market share. In the short term, more parties will undergo pilot and proof of concept projects, and domestic banks are likely to partner with counterparts overseas for the purpose. There will be an initial opportunity for banks or companies like Earthport to charge clients for the ability to make instant global payments, especially as IDC expects initially that Ripple will be adopted not as an industry-wide solution like UK Faster Payments, but by innovative banks.

However, the fact that the US Federal Reserve is prepared to countenance a new payment network based on the principles of a distributed ledger shows the strength of the idea. The innate advantages of speed, reliability and transparency of protocols such as Ripple will see them win out over conventional payment networks. International payments are increasingly out of step with the customer experience consumers and businesses expect in their modern dealings, and a payment network based on distributed ledgers, such as Ripple, is a 21st century solution to this problem.

Please Note: Extended description available upon request.

In This Perspective
International Payments: An Area Ripe for Innovation
Enter Ripple
The Ripple Universe
Early Movers Will Reap Rewards
The Benefits of Ripple
Ripple is Regulator-Friendly
Ripple is Bank-Friendly
There Would be Little New Investment for Compliance
No Crypto-Currencies are Required
Challenges for Ripple
Planning Ahead
Learn More
Related Research
Figure: Ripple and Bitcoin: Not to be Confused

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