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Ripple Is Set for ‘Rapid Growth’ in APAC Region Cross-Border Remittances

Ripple is slowly becoming a force to be reckoned with as far as the international remittance market is concerned. The company is consistently in the news for some of the heavy moves it is making to control cross-border payments. Ripple also has a significant interest in the Asia-Pacific (APAC) region as the remittance market in the area is huge. In a recent publication, Ripple lays out the specific challenge with the APAC remittance market and the best solution to the challenge. 

According to Ripple, one of the largest problems with remittance in the APAC region is a very strong dependence on cash. Most parts of the region still prefer cash transactions, a method that can very easily stifle any innovations.

In the Philippines, for example, a solution was rolled out. The solution presented customers with a way to make payments digitally to their bank accounts instantly. Regardless of the ease of this new method, Ripple explains that “adoption remains stubbornly low and cash remains as the most critical payout option for remittances.”

A similar situation is found in Thailand. While the adoption rate of a similar solution in Thailand is much higher, there is still a strong dependence on cash. In fact, Ripple says that Thai people still rely on cash for a whopping 90% of domestic payments. The new solution only reduced this number to 83% between 2016 and 2018.

Ripple also stresses that while these solutions seem to address the problem with places like The Philippines and Thailand, Australia is not the same. This is because Australia’s underbanked or unbanked population sits at an ignorable 1%. Ripple says addressing any problems here would involve increasing access for Australians to their bank accounts.

While solutions have already been presented above, these solutions are simply not globally scalable. The main solution would be to try to offer more payments outlets to areas affected. However, doing so would require heavy financial and human resources that might be a little too expensive to implement.

One way out of this would be to find institutions on ground in these places and form some partnerships. However, even with that, a lot of resources would be expended. This is because payment partnerships would require specially-designed systems and networks, for each partner.

Ripple’s easy solution is On-Demand Liquidity (ODL). Formerly known as xRapid, ODL is a simple way to handle cross-border transactions. ODL promises significant speed and efficiency by taking advantage of blockchain technology.

With ODL, all of the time and energy, including the specially-designed networks, would be unnecessary. ODL already uses XRP as a bridge between two fiats, allowing real-time fund transfers at ignorable transaction fees.

Bank Asia, based in Bangladesh, is now one of the many institutions on Ripple’s network. Although not officially announced, a Twitter user revealed the institution’s logo on a Ripple document from December last year. While not a lot of information is currently known, there’s a strong chance Bank Asia uses ODL.

As of December 2017, Bank Asia says it has assets worth $3.4 billion. It was established in 1999 and has a staff strength of 2,256 and 128 branches.

Ripple Is Set for ‘Rapid Growth’ in APAC Region Cross-Border Remittances

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