It’s no news at this point that Ripple (XRP) is making headway with financial institutions around the world, as they take to its cross-border payments solutions for faster and cheaper transactions.
Now Ripple has the appreciation of the World Bank, which makes special mention of its in an article discussing improvements in remittances. As it correctly mentions, remittances is most expensive for those that need it the most – natives of developing nations who go abroad and send funds back to their native homes.
Remittances are more expensive precisely in the corridors where they are needed most. Sub-Saharan Africa remains the most expensive region to send money to, with an 8.97% average cost. Cross-border payment innovations can help reduce operational costs for remittance service providers.
The report draws attention to the several Distributed Ledger Technologies (DLTs), including Ripple’s xRapid technology – for which several institutions have run pilot programs – and Circle’s Pay service.
It then refers to Ripple’s pilot program for the US-Mexico corridors. Ripple concluded that there was a savings of 40 – 70% in this particular pilot, with payments taking only a few minutes, as opposed to a few days when executed to a foreign exchange broker. Mercury FX, which uses xRapid, reports that over $1.8 billion worth of remittances has been executed through Ripple.
Acknowledging that there is much to be gained from DLTs, the report reads,
DLT-based cross-border payments potentially offer a promising pathway to dramatic improvements in the lives of millions of people in emerging economies. DLT could improve the traceability of remittances and reduce compliance costs for MTOs and supply chain payments, stimulating economic activity in destination countries.
There are challenges, of course, and the authors state that regulation across multiple jurisdictions and competing technologies, like SWIFT and its improvements, may serve as obstacles for DLT-based cross-border payments.
In any case, Ripple is making exceptionally good progress when it comes to roping in partners for its RippleNet and convincing entities to use its xRapid technology for cross-border payments.