Ripple shows numerous inefficiencies of modern banks when it comes to cross-border payments and announces new ODL corridors
According to information from Ripple, the team has released a report showing that the cross-border B2B payments industry for small and medium enterprises (SMEs) and remittances have witnessed strong growth.
SMEs are increasingly reliant on cross-border #payments, yet 71% say that these payments are problematic. Download our report to learn how financial institutions can tap this high-growth revenue opportunity. https://t.co/JCz9jdoxtV
— Ripple (@Ripple) June 11, 2021
Ripple shows numerous inefficiencies of modern banks when it comes to cross-border payments
Ripple has detailed the inefficiencies of the legacy banking system when it comes to cross-border payments for SMEs. SMEs are increasingly reliant on cross-border payments, yet 71% say that these payments are problematic.
Since 2016 to date, the cross-border B2B payments industry for SMEs and remittances has witnessed strong growth. In particular, major growth and expansion are taking place in emerging markets.
Despite the recent massive increase, the report said, the B2B SME market of cross-border payments has been constrained by the lack of traditional financial services.
Moreover, international payment fees are also very high and in some areas, no one offers these services at all.
Over the past five years, and especially during the past five pandemic years, many workers who have worked from home or whose jobs are working outside, as well as many are buying from online stores, including Including food and other everyday basics, demand for fast and secure online payments has skyrocketed since before the pandemic hit.
SMEs rely on cross-border payments to expand their business and attract new customers. Another drawback of today’s cross-border payment systems is a large number of intermediaries.
All of these nuances can have a negative impact on the ability of small and medium-sized businesses to scale and stay afloat.
The report stated that SME pain points as the reports lay them out:
- Limited visibility into the total costs and timing of payments
- No traceability of when the payment will actually arrive
- Settlements slowed down by transfers through correspondent banks
- Very expensive foreign exchange spreads and fees
Ripple reminds us that blockchain technology can solve all of the above problems, especially RippleNet and the ODL service based on it.
The company also reminded that recently, two of its customers, InstaReM (based in the UK) and BeeTech (based in Brazil) have established a new ODL payment corridor for fast cross-border payments. and cheap to Portugal, Germany, Spain, France, and Italy.
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