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Ripple’s ODL Customers Can Now Seek Loans In XRP

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Ripple has undoubtedly been making headway in terms of global expansion and making partnerships. The payment protocol has been rolling out several platforms to boost its presence in the crypto-verse while benefitting the community. In more recent updates, Ripple announced the launch of its latest venture.

Loans In XRP

Giving a twist to the traditional process of garnering loans from the banks, Ripple seemed to be influenced by the DeFi space. Recently, Ripple announced the launch of the “Line of Credit” platform that was solely built to providing loans in XRP. The platform is reportedly still functioning on its beta version and is said to deliver loans to specifically its On-Demand Liquidity [ODL] customers.

Over the past few months, Ripple has been a great advocate of the world steering towards digitalization. However, in its latest blog post, the platform highlighted how the “limited access to working capital” has been a major hurdle that hinders the growth of a company. Through the Line of Credit, users of Ripple’s ODL platform would be able to purchase XRP on credit. Users that have borrowed XRP from Ripple would be charged “one fee”. While the exact fee is unclear, the platform suggested that it was lesser than other credit options that are available in the market.

Elaborating on its latest platform Ripple wrote,

“Ripple’s Line of Credit solves this problem for our customers by providing upfront access to capital for every market through one simple credit arrangement – simplifying access to financial solutions that accelerate business performance and scale.”

Ripple’s ODL platform has been lauded by many, however, it seems to be enduring a downfall lately as the liquidity of the ODL platform across several corridors has been faring low.  Ripple’s ODL market has ventured into Australia, the Philippines as well as Mexico and intends to enter the European region, Africa, Latin America, Middle-East as well as the Asia Pacific.

Ripple Informs Customers About Cloud Capabilities as COVID-19 Continues to Wreak Havoc

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The ongoing coronavirus pandemic has brought several industries and sectors to their knees, with workers being laid off at an alarming rate. Despite the flood of capital from world governments, it has become painfully clear that we need to come up with new ideas to sustain the economy in the future.

Ripple has recently taken to the internet to find ways in which industries will not be caught off guard the next time a global catastrophe occurs. Speaking about the RippleNet Cloud, Brad Garlinghouse led organizations to point out a myriad of advantages of online data storage.

Ripple claimed that COVID-19 made it painfully clear how cumbersome traditional processes are, with an added focus on streamlining future processes. Rapid time on the market and scale to meet increased consumer demand in real-time require lean infrastructure operations and elastic, cloud-based infrastructure. Though many advances have been made in the field of technology, Ripple was critical of the process of implementation.

According to the San Fransisco based cryptocurrency organization, many firms were hesitant when it came to integrating new technologies. The latest Ripple Insights blog said:

“Cloud technology and security has significantly improved, and there’s no longer a reason for customers’ financial data to live on aging legacy systems that are inflexible and expensive to support. If there’s one thing we can learn from the pandemic, it’s that we need improved solutions. The global economic crisis proves that full-scale cloud solutions are up to the task.”

Although RippleNet Cloud was not the first to hit the market, it has become an increasingly integral part of the COVID-19 era. A RippleNet Cloud customer can go live on RippleNet five weeks faster than the others. Those who are part of the Cloud can also avoid hardware requisition or staffing which inherently boosts transaction speeds.

On-Demand Liquidity or ODL has been the ace up Ripple sleeve with several of its partners taking advantage of the technology. ODL plays an important role when it comes to settlements on the Cloud. RippleNet Cloud customers also have the option of managing their portfolio and connections much more seamlessly using just one Application Program Interface [API]. Streamlining the internal process also gives Ripple the room to make Cloud solutions cheaper than ever before.

The latest release from Ripple wanted to inform customers about the additional benefits that can be obtained from the RippleNet Cloud. Since cloud solutions are easier to deploy, organizations are set to save a significant amount of capital. Only time will tell if companies choose to go down the new path or continue to stick with the beaten path.

Is Ripple Looking to Enter the Loans and Lending Market?

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Ripple was the latest member to make waves in the sector, as the company may have decided to enter the lending department. Although no details on implementation plans have been released, the XRP Army has seen positive signs in Ripple’s most recent job posting.

According to the official release of Ripple, the company is looking for a Director of Product Management in the Loans Department. Ripple stated that the role of the director was best suited to someone who was familiar with the company ‘s ethos and mission. Brad Garlinghouse, led by the organization, has been engaged in rampant hirings from across the mainstream sector, with the latest Vice President of Product Management coming from Google.

While the objective of Ripple in the lending sector has not yet been confirmed, it is safe to assume that they will be tasked with creating the relevant organizational structures for the functional offering of loans. Another deliverable was to understand how Ripple can better serve clients of RippleNet when it comes to working capital loans. According to the official release of the company:

“RippleNet traditionally served its customers with a cross border payment offering, however, Ripple is expanding into loans.  This person will bring a new loan product to market from concept to launch for RippleNet customers.  This person will bring strong leadership skills as they will need to collaborate heavily with cross-functional internal teams and the financial ecosystem of partners and customers.”

Recent reports have shown that the offer is still in its incipient phase, with customer feedback being a ‘make or break’ point. Providing working capital was a need for an hour, as several smaller companies were suffering from a lack of liquidity. Ripple believed that the On-Demand Liquidity [ODL] payment solution would serve as an engine for an efficient payment machine.

The story between Ripple and lending

Although the company is known across the board for its umpteen partnership, Ripple was also popular for its disruptive moves in the industry. Lending may now look like a new option, but surprisingly, the initial framework was first discussed in 2017. Three years ago, Miguel Vias, the former head of XR markets, said that lending would become a focus once the XRP system had been fully developed.

Vias even said that one day Ripple would try to bridge the gap between traditional markets and the cryptocurrency industry. This may be the reason why Ripple has not only partnered with crypto companies over the years but also with traditional banks. Some of Ripple’s most popular partners include MoneyGram, Flash FX and Banco Santander.

Effect on XRP Price

Ripple has always expected that its numerous updates and developments would one day contribute to the price of the XRP. Although the third-largest cryptocurrency was still struggling to find its feet, XRP supporters were still confident of a bull run.

At press time, XRP traded for $0.2 with a total market cap of $8.86 billion. A 7.83 percent dip over the past week caused the 24-hour market volume to crash to $2.26 billion.

Ripple: Current Remittance Solutions and Scalability Barriers in APAC

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On 14th February, the official website of Ripple published a blog on “How to Tap Rapid Growth in Asia-Pacific Remittances” as a part of their remittances series. Written by Pegah Soltani, from the Product Marketing team of Ripple, the article outlines the current remittance solutions in APAC, the scalability issues and a solution to the current challenges. 

In the past few years, Asia-Pacific regions have observed an immense growth in terms of remittances. Be that as it may, due to the current difficulties related to converting fiat from one currency to another, the high cost of transactions is neglected due to its rapid growth. 

According to Ripple, to tap into such a market that generates nearly 2 billion remittance transactions per year, it’s vital to have an international reach in addition to the locally customized services and offerings.

Remittance Solutions in APAC 

Philipines

The Bangko Sentral ng Pilipinas [BSP] and the Philippine Government recognizes digital payments as a policy priority to enable citizens to seize the opportunities of the digital revolution.  Irrespective of the newly launched low-value instant payment system that allows users to make digital payments to bank accounts, its adoption has been mulish. This results in service providers being hooked to fiat as the primary monetary value despite the limitations.

Thailand

In 2017, PromptPay an instant payment provider registered 49M users in Thailand. As per records, from 2016 to 2018, an increase of 83% in the volume of digital payments was recorded. Compared to the Philipines, Thailand has seen greater adoption of modern payment mechanisms even with two similar digital payment providers. 

It’s imperative to credit the strong influence of PromptPay to drive the adoption of digital payments in Thailand. In the Philipines, cash is needed for a monetary transaction, while, digital payments with PromptPay is required as table-stakes in Thailand. Suggesting that, “offering money and different wallets notwithstanding PromptPay can help increase a serious edge”.

Australia 

In Australia, the market for remittance works differently as compared to the emerging APAC countries. It is primarily a “sending market” for remittances and the receivers in the Australian market possess contrasting characteristics due to its high level of financial inclusion, and income. 

According to the World Bank’s data, 98.90% of Australians are banked. Concluding that the best proposition is to “focus on bank account access through partners or via the New Payments Platform [NPP].” Considering Australia’s developed payments market, “instant and transparent payouts with 24/7/365 availability” and transparent fee structuring model would provide the best-practiced payment service.

Feasible but not scalable

The current remittance solutions these APAC countries offer are feasible but aren’t scalable globally. Some challenges they counter are:-

  • Exhaustion of working capital and human resources to develop competitive payment capabilities.
  • Lack of optimal customer experience with banking or correspondent partnerships as it requires ample time and energy.
  • High remittance fees to maintain a partnership network, and numerous integrations needed to be built and managed for destination currencies.

Solution? On-demand liquidity.

With the payment revolution that blockchain and digital assets kickstarted, remittance providers have better options than traditional-complex payment mechanisms. 

RippleNet’s on-demand liquidity [ ODL ] acts as an alternative to traditional transactions across borders. ODL uses the XRP [ XRP ] as a real-time liquidity bridge between multi-currency senders and receivers.

With this model, when a request is initiated from the sender, the send-side exchange debits the sender’s account and converts that amount into XRP. The XRP is sent across the XRP Ledger [settlement under 3 seconds] from the send-side exchange to the receive-side exchange. After this, the receive-side exchange converts XRP into the respective local currency. Ripple’s technology validates the amount received. The receive-side exchange forwards the payment to the receiver. Followed by a transaction confirmation from both ends. 

As stated by the Ripple team, customers using ODL can free up capital in the span of seconds, guaranteeing the most competitive FX rates and processing global payments at unprecedented speeds.

The advantages of fast transactions and cost-efficient transfers enables customers with an easier, safer and reliable route for cross-border remittance.

With XRP peaking to its highest value by far in 2020, the community has expressed its views on the blog. 

Dilip Rao, previously Global Head, Infrastructure Innovation at Ripple said:

Ripple Plans to Stamp Cross Border Payments System With Intermex Partnership

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Some cryptocurrency companies have taken it upon themselves to improve the state of cross border transactions across the world to create a stronger financial ecosystem. One such company has been Ripple, the parent of the third-largest cryptocurrency on the charts.

Ripple recently announced its latest partnership with Internataional Money Express Inc to strengthen the cross border payment infrastructure between the United States and Mexico.

Ripple revealed that this partnership was taken to make global payments easy and cost-effective without the hassle of the current financial structure. The Intermex-Ripple partnership will ensure that the cross borer transaction demands in the Latin American and Carribean corridors were taken care of.

According to the latest blog by Ripple:

“The partnership will enable Intermex to leverage RippleNet for faster, transparent cross-border remittance services between the United States and Mexico. More remitters than ever are sending money home to their loved ones through this corridor. According to the World Bank, Mexico is the third highest country with remittance recipients, $36 billion remittance flows in 2019—with the U.S. topping the list of countries with the highest inbound flow to this region.”

Intermex is considered as pone of the biggest remitter service providers between the United States and Mexico. The organization processes more than 30 million payment transactions a year with new customers being added every single day. Intermex runs its operations through a network of 100,000 payer locations. Intermex claimed that it will be able to streamline its settling process using Ripple‘s On-Demand Liquidity  [ODL] index.

Using ODL technology, Intermex will be able to eliminate the need for financial institutions to pre-fund accounts in destination currencies. This allows such organizations to release more capital for better exchange rates. Ripple admitted that post the launch of the ODL, there has been a massive uptake in the industry. It is not yet clear when the company will officially release the ODL integrated product.

Intermex is the second company after MoneyGram that Ripple has partnered with to improve the cross border department. MoneyGram CEO Alex Holmes had also revealed that over 10 percent of US-Mexico remittance on MoneyGram was done on the ODL.