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Blockchain technology is picking up steam in the financial technology (fintech) sector, particularly in the area of international payments. Cross-border transactions are becoming a prominent application of this innovative technology.
In its latest report, Ripple—a leader in digital asset infrastructure for financial institutions—delves into Ripple Payments, a blockchain-based solution designed to tackle the hurdles associated with global transactions.
The worldwide payments landscape is swiftly transforming, with increasing demand for instantaneous cross-border services. Yet, many providers face challenges in streamlining their services due to the disjointed nature of the correspondent banking system.
Blockchain Solutions for Global Transactions
Ripple Payments harnesses blockchain technology to facilitate near-instant settlement of international transactions. With over ten years of strategic partnerships, the system minimizes the number of counterparties involved, which can lead to reduced costs.
Brad Garlinghouse, CEO of Ripple, remarked, “Blockchain is making headway across various sectors, but its most impactful application is in cross-border payments. Companies are looking for global payment solutions that enable instant settlement, and blockchain can help achieve that.”
This solution aims to provide around-the-clock access to cross-border payments, including during weekends and holidays, which could set it apart in the financial services sector where traditional banks often have limited hours for transactions.
Ripple Payments utilizes the XRP Ledger along with its native cryptocurrency, XRP. This was specifically created to facilitate quick, cost-effective, and scalable transactions, serving as the foundation for the company’s payment, custody, and stablecoin solutions.
Broadening Market Reach and Gaining a Competitive Edge
For fintech companies aiming to expand their global footprint, setting up payment systems in foreign markets can require significant resources. Ripple Payments simplifies this process by offering a single API integration, which may cut down on the time and investment needed for entering new markets.
The system provides access to local payout networks in more than 80 countries, complete with pre-negotiated exchange rates. This capability can help fintechs offer competitive pricing to their clients while also benefiting their own profit margins.
Marcus Treacher, Senior Vice President of Customer Success at Ripple, explains, “With Ripple Payments, fintechs can connect to a global payments network and enhance their market presence through a single API. This alleviates the need to pour time, capital, and other resources into setting up and managing foreign accounts.”
The solution also aims to free up capital that is often tied up in pre-funded bank accounts, enabling fintechs to reallocate those funds for other business investments.
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