Ripple aims to provide its users with seamless and hassle free exchange of digital assets. To that end, Ripple’s proposed solution would allow global payments that are instant. This not only provides a great service for normal users, but also for banks. Developing banking infrastructure is very expensive. However, by utilizing Ripple’s new blockchain instant payment network, these banks can expand their services. Expanding into new territories that were previously either too expensive or very difficult to set up shop in, would only increase profit.
Old Technology Meets Blockchain
Despite the advancements of the digital revolution, the world’s banking systems are severely outdated. While the internet promised us the ability to connect instantly, the financial system seems left out. Your “instant” transfer could take several days, possibly weeks, and you could also be punished with some very unsavory fees for the privilege. This is particularly true if you need to send money across borders which is still annoyingly difficult and sometimes prohibitively expensive.
This potentially creates valuable new revenue streams to boost these corporation’s bottom lines. This technology does not stop at remittance though, as it can also be utilized for digital asset exchanges, corporate capital management, and even payment providers. Virtually any company or service that has a requirement for global liquidity could tap into this blockchain in order to speed up their processing times and to cut their fees for doing so significantly.
Partnerships With Other Financial Institutions
How have these financial giants responded to this new technology though? Large institutions such as MoneyGram and Western Union recently signed up as partners. They also tested Ripple’s xRapid and on demand liquidity pool that is built around XRP. These companies were reportedly delighted with the results. Financial transactions that would normally take 2-3 days, cleared in under two minutes. According to them, they actually made a lot of savings during the test. They claim to have saved circa 40-70% of what they would normally pay to other liquidity providers .
This is just one test of Ripple’s power, and they have plenty more innovations to come. It’s become very clear now that financial institutions are watching them intently, and competitor SWIFT has even scrambled to create their own solution to compete with this industry shake up. Whether you love or hate Ripple, they have helped to make one thing perfectly clear, the Blockchain is here to stay, and it’s good for a lot more than just speculating on various junk ICOs and meme based cryptocurrency assets.