Picture this: a superhighway that goes everywhere without geographical and physical limitations. On this highway, cars move without crashing into each other and at lightning speed. The best part? The negligible toll charges that would undoubtedly set off a ripple of excitement.
A dream scenario? Not in the cross-border payments industry. If you haven’t heard, US fintech giant Ripple recently announced that it has agreed to acquire 40% stake in Tranglo. Thanks to Ripple’s global connectivity and our in-depth knowledge of the APAC and Southeast Asian corridors, the world is another step closer to this payment superhighway.
According to Ripple, Southeast Asia is the fastest-growing region for the adoption of RippleNet, the firm’s equivalent of Tranglo Connect, driving global payments with a single access point. Ripple’s commitment to this end is reflected in its appointment of seasoned financial and tech leader Brooks Entwistle to lead and scale the company’s operations in the region.
Ripple tech: What is XRP and ODL?
Typical cross-border payments go through what we call currency conversions. From the local sending currency to the exchange currency and then to the receiving one, payment instructions involve central intermediaries. A transaction processed this way needs to go through many different pairs of hands. Sometimes, this becomes cumbersome and bogs systems down. Chances of something going wrong somewhere also go up.
This is what sets Ripple’s XRP apart. In short, it is Ripple’s own digital asset. Ripple uses it to bridge currencies without going through the traditional intermediaries. This makes funding, exchange and settlement much easier and faster. Ripple claims a 0% failure rate, which is impressive.
ODL stands for on-demand liquidity. As every transaction uses XRP as the exchange currency, Ripple is able to offer ODL as an alternative to the prefund model. With ODL, there is no need to lock their funds in a certain currency. Businesses no longer need to have a huge starting capital. They can free up working capital, drive growth and reach more customers. For end consumers, businesses can opt to spread these savings back to them.
How Tranglo remittance partners are poised to benefit from this
Increased liquidity as ODL and DLT streamline payment process
Tranglo’s digital infrastructure enables ODL to be implemented more quickly and widely across the region. As it stands, businesses are jumping on the RippleNet bandwagon, but the market penetration of ODL remains lower than expected despite the obvious benefits.
Longstanding partnerships with regional payments giants can build trust in new and efficient alternative systems like the distributed ledger technology (DLT), enabling superior and more efficient ways to secure transactions. As mentioned above, ODL can free up valuable resources for businesses, streamlining the end-to-end payment process.
Same flexible payout methods
When it comes to cross-border payments, good customer experience is subjective. Regional trends determine a party’s preferred payout method. For example, bank transfers are the preferred payout vehicle in Malaysia, while cash pickups remain common in the Philippines. Meanwhile, we have the rise in ewallet payout in Africa.
In this respect, Tranglo will retain its core flexibility that allows businesses to keep making payments the way they want. This allows front-facing businesses to provide a seamless multichannel experience for their customers and grow their channels.
Tranglo is not building something new, but better. We call it a network on a network. Imagine two lines running parallel to each other but maintaining full, on-demand communication with each other. That’s how we work together.
The future of blockchain-driven payments
Our technology team is already working round the clock to harness the power of blockchain and DLT. We are applying what we learn to grow our payment capabilities even further. We are excited to translate these new developments into our solutions so businesses can experience cross-border payments that are mostly upsides.
Evidently, even Ripple thinks we are going in the right direction.
Want to experience instant cross-border payments at a fraction of the cost? Contact us today.