By Jen Wieczner
November 19, 2018

Blockchain may not be the revolutionary payments system its supporters have made it out to be—at least not yet.

While blockchain—the technology that underlies Bitcoin and other cryptocurrencies—has been hailed by companies including IBM and Mastercard as a way to more quickly move money around the world, not everyone is sold.

TransferWise, for example, a London-based startup that transfers money between more than 70 countries, has yet to see an advantage to using the technology.

“We’ve heard this dream many times from different people. However if you start digging into it, you realize that it may look great on paper, but in reality, to make use of it, it’s really hard,” Taavet Hinrikus, cofounder and chairman of TransferWise, says on the latest episode of Fortune’s “Balancing the Ledger.” “We’ve looked at different blockchain technologies, but yet we haven’t found anything which enables us to do what we do in a way that is cheaper or faster.”

Part of the problem is that blockchain technology has not yet achieved enough adoption among banks to make it more efficient than the prevailing payments systems. And as fintech companies find new and less expensive ways to transfer money, the bar that blockchain technology must clear to make it worth switching to has gotten higher.

TransferWise can move money from Australia to the U.K. in 15 seconds while charging a fee of 1% or less, whereas it would take days (and likely cost more) to make the same transaction at a bank, Hinrikus explains. What’s more, TransferWise has been profitable for two years in a row despite its low fees, he adds.

The company has looked at Ripple, a startup that uses blockchain technology to facilitate cross-border payments between banks virtually instantaneously, but has not seen a better proposition than what TransferWise currently offers, Hinrikus says.

“If every bank in the world was going through the Ripple network, it would be amazing. Yet how many banks are using Ripple today in production? It’s a very short list,” Hinrikus says. “In that sense we’re big supporters of Ripple or anything else…and if any of these gets enough adoption, and it actually materially helps us do things cheaper and faster, we’d love to, but so far we haven’t found one.”

His comments echo those of Western Union CEO Hikmet Ersek, who told Fortune in June the money transfer company had not seen a benefit from Ripple’s technology during a six-month trial period. Ripple has recently signed up PNC Bank and Santander, among others, to use its products, but the bulk of its banking customers are in Asia.

TransferWise, for its part, has been able to keep its costs low by offering its services solely online (forgoing the overhead of brick-and-mortar branches), and using technology to streamline internal processes so the startup can stay lean. Its key innovation, however, is that it built its own payment network, allowing it to circumvent the SWIFT system that banks around the world rely on to transfer money between each other. By cutting out the middleman, TransferWise can move money directly between its customers’ bank accounts.

“That’s kind of the only way that we can really make things 10 times better than the existing [options] we see out there,” Hinrikus says.

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