In the last Swell 2018 session, R.J. Pittman, eBay’s former Head of Product, agreed that Ripple (XRP) was making headways to becoming the leading solution provider in the cross-border settlement industry. Ripple is coming up as the most suitable technology that is addressing existing challenges surrounding the payments and transaction industry.
At present, real-time financial institutions around the world are partnering with RippleNet to improve their cross-border settlement services. By partnering with the protocol, Ripple is introducing these financial institutions to the growing global network of institutions that are contributing to the growth of the Internet of Value.
As a global payment solutions provider, the US-based blockchain firm is availing financial payment solutions to the world, facilitating the frictionless transfer of value across entities leading to an Internet of Value.
Thanks to its careful, structured platform, the Ripple protocol ensures the transfer of funds from parties is as easy as sending information electronically — and, at the lowest cost possible. By allowing holders to transfer value directly without using corresponding financial institutions, Ripple (XRP) offers solutions that are reducing the cost of liquidation.
As the economic trends, migration patterns, and international trade continue to change and evolve, the market size of the cross-border settlement industry continues to grow as well. At the moment, cross-border payments are dominated by financial institutions and banks, taking up 95 percent of the market share. However, their cross-border money transfer services are characterized by delays, lack of transparency, and high tariffs.
These long-standing inadequacies have created an opportunity for new players like Ripple that can resolve these difficulties thanks to its cutting-edge technology.
With each day that passes, blockchain technologies and Fintech solutions are changing the money transfer landscape solving critical problems and replacing existing systems in some cases.
Problems Associated to Cross-Border Payments
The global commerce and payment sector are made up of many different use cases such as disbursement, shared economy, remittances, and banking, which takes the most significant percentage of the current market.
In the current period, cross-border payments are perceived as cumbersome because of the processes that are attached to the activity. The lack of transparency on tariffs, the involvement of multiple financial institutions across different locations, and delays have been significant concerns for the industry.
Different companies face different problems with cross-border payments depending on their size. Large companies that take part in high-value cross-border payments are concerned with the lack of transparency in regards to foreign exchange rates. Smaller companies are concerned with the high costs of transferring money internationally and the difficulty to access reliable services in the industry.
Being costly, uncertain, and slow traditional cross-border settlements are not meeting present-day e-commerce demands for international money transfer services that are associated with lower costs, improved transparency, and higher speeds.
As a way to combat these pressures, banks are adopting new technologies that promise to boost international payments while reducing operational costs and improving transparency. The global payments industry is currently witnessing disruptive changes. Traditional players such as SWIFT are receiving a run for their money from new technologies such as Ripple’s cross-border payment platform.
The world will read the writing on the wall: Ripple is the Future of Cross-Border Settlements
At present, the market has many significant players who are offering cross-border money transfer services around the world.
Ripple as an open-source, distributed settlement platform that supports near-instant settlements with minimal fees is on the pathway to becoming the leading technology in the industry. Ripple’s technology utilizes pathfinding algorithms to find a pair of currency swaps that facilitate the lowest possible tariffs are implemented for the cross-currency transactions.
According to information from RippleNet, more than 200 banks and financial institutions are using Ripple’s cross-border payment product, xCurrent for their cross-border payment facilities.
Some of the financial institutions and banks using xCurrent are major international money transfer service providers that operate in multiple countries. Companies such as Banco Santander, PNC, UBS, DBS, America Express among many are in a working partnership with Ripple already. As things stand, it is just a matter of time when the blockchain technology will trounce the current industry bigwigs to rise as the dominant player.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.
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