More and more financial institutions are beginning to harness the power of blockchain and distributed ledger technology (DLT) for payments.
By setting up decentralised ledgers for payments, blockchain technology could enable faster payments at fees lower than those charged by banks, according to a CB Insights analysis. The analyst firm also noted blockchain payments could cut operational costs and bring businesses closer to truly real-time settlement.
A Blockchain in Payments report for 2020 by our strategic partner, and enterprise crypto and blockchain leader Ripple revealed financial institutions see many benefits of such payments. These include:
- Increased payment speed (40%)
- Best exchange rates (32%)
- Automated payments (28%)
- Reliability of payment (27%)
- Access to more countries (26%)
- Access to currency (26%)
A company competing for market share in the diverse international remittance industry should pay attention to these benefits.
“Adopters of blockchain in payments see the benefits that digital assets provide for faster settlement, better forex rates and the ability to provide new services, like automated payments for underbanked populations.”
— Ripple Blockchain in Payments Report
As international businesses pursue aggressive growth agendas, their calls for vastly better B2B payments are growing louder. Remittance companies looking to provide a competitive advantage to their clients and customers need to offer instant, affordable payment solutions.
Some early innovators are already integrating crypto-enabled services into their offerings. For example, companies such as Novatti and SBI Remit play a vital role as on and off-ramps on Ripple’s global financial network technology RippleNet for its On-Demand Liquidity (ODL) service.
ODL leverages the digital asset XRP to eliminate prefunding, reduce operational costs and unlock capital — for faster and more affordable cross-border payments. Additionally, Ripple’s partnership with Tranglo is fuelling the expansion of new ODL corridors in Asia Pacific. The figures are encouraging: Tranglo processed over USD200 million in ODL payments between Sept 2021 and May 2022.
“A simple bank transfer has to bypass a complicated system of intermediaries, from correspondent banks to custodial services, before it ever reaches any kind of destination.”
— CB Insights
Blockchain payments can provide true real-time settlement, greater transparency and security. Almost 60% of respondents to the Blockchain in Payments survey by Ripple view a blockchain network with a single API link to many international partners as key to delivering cost savings.
This is what Tranglo and Ripple’s partnership is all about: a shared mission to transform cross-border transactions to be faster, cheaper and more secure — while building trust in DLT.
