The future of payments is a 3-way battle between banks, fintechs, and crypto

When Satoshi Nakamoto launched Bitcoin in January of 2009, he included in the blockchain’s genesis block a newspaper headline about the U.K. government once again bailing out the country’s banks—a message that reinforced the new cryptocurrency’s identity as an alternative to centralized money systems. That initial hostility between banks and crypto persists to this day, but now a third entity, fintech companies, has come to pose a challenge to both.

I was reminded of this while reading a recent Bloomberg Businessweek story about banking giant HSBC launching a new international payment service, which it had developed in secret, to go after Wise, the firm that pioneered low-cost cross-border transfers. While London-based Wise’s share price initially took a hit on the news, skeptics of HSBC’s plans pointed out that big banks have a lousy track record of keeping up on the technology front.

Recent examples included Santander’s 2020 decision to shutter its own Wise competitor after only 15 months and, to a lesser degree, U.S. banks’ launch of Zelle to compete for peer-to-peer payments. The app was supposed to be a PayPal killer, but a 2023 survey shows it lags far beyond both PayPal and its affiliate Venmo. This doesn’t surprise me as Zelle is one of those services I use on rare occasions when I must, such as paying my accountant, while I use the more user-friendly fintech apps to pay friends or family.

And while fintechs appear to be holding their own against banks, they also continue to make inroads in the world of crypto. This includes another U.K. firm, Revolut, that recently announced plans to launch a hyper-low-cost crypto exchange for professional traders. Meanwhile, the likes of Robinhood and PayPal have remained committed to building out their own crypto services, which have become more sophisticated every year.

For pure crypto firms like Coinbase and Binance, the fintechs’ push into crypto is a mixed blessing. It represents a threat since many first-time crypto users can get access to crypto via platforms they already use, undercutting the crypto-first firms’ opportunities for growth. The flip side is that the fintechs are boosting overall crypto adoption, which leads to a rising-tide-lifts-all-boats dynamic for the entire sector.

As technology continues to improve at both banks and fintechs—something I wrote about recently in the context of merchant peer-to-peer service Airwallex—it could also undercut crypto’s claim to offer a better way to move money around the world. Even if it does, though, Bitcoin’s original promise to be a form of hard money free from government meddling or bailouts still holds up.

For consumers, all of this is as a good thing. Even if it’s unclear who will come out on top in the evolving three-way battle between banks, fintechs, and crypto, the immediate result is more choice and lower fees. It’s hard to complain about that.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

This story was originally featured on Fortune.com