Ripple: Cross-border payment services can become smoother by using Blockchain
In 2019 alone in Singapore, Fintech investments have reached $ 1 billion, while it is estimated that the total volume of business transfers made in 2019 will reach a whopping $ 22.23 trillion. America, Singapore and the rest of Southeast Asia have become a hot spot for Blockchain and Fintech innovation. Among them, the most famous startups in the cashless payment segment are GrabPay, GOPay, and Paytm. These companies are now competing with incumbent global companies like Western Union and Apple Pay.
Financial technology companies in Singapore raised a record US$735 million (S$1 billion) in the first nine months of this year. Source: Accenture.
Southeast Asia has become prominent as a startup battlefield
In the payment space, not using cash brings convenience and speed for users. Mobile wallet payments are now beating credit cards in countries like Indonesia, Thailand, and Vietnam.
However, for all the advances made in mobile payments, very little work has been done to solve the problems of cross-border payments. Global transactions are backed by outdated systems, requiring days to pay and high transaction costs. The World Bank estimates the cost of remittance averages more than 7 percent of the amount deposited. In particular, traditional remittances require a lot of debt and credit on different accounts to transfer the value of money from the sender to the receiver.
The current infrastructure for cross-border payments cannot meet the needs of individuals today. Payments must be made immediately to ensure that their daily lives are not interrupted. However, today’s global payments are fragmented because businesses need to partner with several different financial institutions or payment service providers to make connections when required. These connections are bulky and expensive, with no standardization.
In 2016, a McKinsey report estimated that the average US bank would take between $ 25 and $ 35 to process cross-border payments, about ten times the average domestic payment price. The economist also estimates that the transfer cost is about 7% of the money transferred.
Cross-border payment services can become smoother using Blockchain
At the Swell Conference, Ripple announced that more than 300 customers are using their global remittance solutions – half of whom are from the APAC region – to receive significant benefits. To take advantage of large organizations like Siam Commercial Bank, SBI Remit, and Nium, cross-border payment services can become smoother using Blockchain.
Blockchain and digital assets have the potential to change the entire financial industry. Blockchain-based payment networks allow more manageable cross-border payments through a set of specifications and standards that help reduce confusion and ensure that all members of the system have access to the same technology.
Through the use of Blockchain, Ripple can settle payments within seconds with On-Demand Liquidity (ODL) at the cost of only one percent, minimizing costs for senders and participating intermediaries into the whole process. Payments can be transferred from the starting point to the beneficiary almost instantly. Not only Ripple but also other networks like Bitcoin and Ethereum can do the same.
Just as data flows around the world in a matter of seconds, our money will be able to do the same. Emerging technologies such as Blockchain technology can power the infrastructure for such remittance transactions and are the innovation center of fintech, businesses, and consumers in Southeast Asia is ready to reap the benefits fintech brings, especially when crossing payment borders.
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