Financial services giant Mastercard made a significant nod to cryptocurrency-focused Ripple in a recent report examining the future of remittances in Latin America. The report highlighted the challenges facing traditional money transfer services and identified Ripple’s blockchain technology as a potential solution.

Ripple gets the stamp of approval from Mastercard

Mastercard’s report highlighted the key role that remittances play in Latin America. Citing UN data, it details how cross-border payments are a lifesaver for families and communities, especially in low- and middle-income countries. Mexico, for example, received a staggering $55 billion in remittances in 2022, making it the world’s largest recipient.

Money transfer services face high fees and security risks

However, the article points out several problems plaguing money transfer services. High fees, heavy reliance on cash transactions, security concerns and lack of user-friendly digital solutions are the main obstacles for users. These inefficiencies not only make it difficult to send and receive money, but also burden the already tight finances of many people.

This is where Ripple comes in. Mastercard’s report recognizes Ripple, alongside Stellar and Circle, as pioneers in using blockchain technology to revolutionize international money transfers. Blockchain’s core attributes of transparency and immutability offer the potential for faster, more secure and cost-effective remittance services.

#Ripple cited several times in MasterCard’s new report “The Future of Remittances in Latin America: Digitalization, Multiple Rails and the Strategic Role of Partnerships” as an example of blockchain in remittances and CBDC. #XRP not mentioned directly.
1/3https://t.co/6Wj2xOh73b

— WrathofKahneman (@WKahneman) March 25, 2024

The report sheds further light on Ripple’s partner, SBI Remit. The Japanese money transfer service provider started using Ripple’s XRP cryptocurrency for cross-border transactions in three Asian countries last year. This development highlights the real-world application of Ripple technology in facilitating smoother and potentially cheaper money transfers.

XRP market cap currently at $35.3 billion. Chart: TradingView.com

In addition to remittances, Mastercard appreciates Ripple’s collaboration with the island nation of Palau to explore central bank digital currencies (CBDCs). CBDCs are digital versions of a country’s fiat currency, potentially offering faster and more secure domestic and international payments.

A market worth $500 billion by 2026

Mastercard projects digital remittance market share to reach over $500 billion by 2026, reflecting an annual growth rate of nearly 10%. Interestingly, Ripple has a much bolder forecast, estimating that the entire cross-border payments market will reach a staggering $250 trillion by 2027.

Mastercard’s recognition of Ripple is a significant development for the crypto company. It affirms Ripple’s technology and its potential to solve long-standing problems plaguing remittance services, particularly in Latin America. Although the two entities have different views on the size of the market, both agree on the significant growth potential in the cross-border payments sector.

XRP price up in the last 24 hours. Source: Coingecko