Ripple has added 13 financial institutions to its payment network, RippleNet. The companies include Euro Exim Bank, SendFriend, JNFX, FTCS, Ahli Bank of Kuwait, Transpaygo, BFC Bahrain, ConnectPay, GMT, WorldCom Finance, Olympia Trust Company, Pontual/USEND and Rendimento. With these additions, there are now more than 200 customers signed up for RippleNet.
David Lighton, Founder, SendFriend: “The existing correspondent banking system is slow, inefficient and costly. SendFriend was founded at MIT with the belief that there must be a better way to send payments. We are excited to partner with Ripple to do just that. Through our partnership, we are bringing our customers a next-generation, blockchain payment solution that leverages XRP to address many of the efficiency and equity problems with existing remittances. For them, that means cheaper and faster payments.”
Or, says Ashay Mervyn, Head of Emerging Markets at JNFX: “Payments between countries are beset with inefficiencies—inefficiencies around cost, inefficiencies around speed and inefficiencies around transparency. RippleNet is specifically geared to address these problems. For our customers who range from the largest conglomerates in Africa (with operations and commitments in over 40 countries) to individuals in villages in rural Nigeria, our decision to join RippleNet and utilize their payment solution—including XRP for on-demand liquidity—just makes sense.”
RippleNet proposed usage
JNFX, SendFriend, Transpaygo, FTCS and Euro Exim Bank will leverage the digital asset XRP to source liquidity on-demand when sending payments on behalf of customers. Using XRP for liquidity, when sending a cross-border payment:
- assists financial institutions avoid the hassle of pre-funding accounts in destination currencies
- enables them to make faster, lower cost payments than they can through the traditional correspondent banking system.
For other financial institutions on RippleNet not currently using XRP for liquidity but interested in immediate settlement — for example CIMB or Olympia Trust Company – these are able to exploit Ripple technology (including its APIs) tio deliver faster, lower cost and more transparent payments.
“In 2018, nearly 100 financial institutions joined RippleNet, and we’re now signing two—sometimes three—new customers per week. We also saw a 350 percent increase last year in customers sending live payments, and we’re beginning to see more customers flip the switch and leverage XRP for on-demand liquidity,” said Brad Garlinghouse, CEO of Ripple. “At the end of the day, our goal is to make sure our customers can provide excellent, efficient cross-border payments experiences for their customers, wherever they are in the world.”
Some background on RippleNet
Ripple’s solution for banks, xCurrent, is built around an open, neutral protocol, Interledger Protocol (ILP). This enables interoperation between different ledgers and networks. As such, RippleNet offers:
- a cryptographically secure, end-to-end payment flow
- transaction immutability
- information redundancy.
Ripple designed RippleNet to comply with a bank’s risk, privacy and compliance requirements and architected it to:
- fit within a bank’s existing infrastructure
- require minimal integration overhead or business disruption.
ILP Ledger is a subledger of each transacting bank’s general ledger. This component of xCurrent tracks the credits, debits and liquidity across a transaction’s transacting parties. In effect, ILP Ledger enables:
- those transacting parties to settle funds atomically (the entire transaction settles instantly or not at all – no matter how many parties are involved)
- fund settlement in milliseconds
- the elimination of settlement risk (because the payment either processes entirely or fails upfront).
Ripple designed ILP Ledger to provide transacting banks with 24/7, on-demand availability. The combination of such capabilities permits banks to offer low-value, on-demand international payments products and services, which explains why RippleNet now has some 200+ customer institutions operating in over 40 countries across six continents.
Enterprise Times: what does this mean
ILP is an interesting concept (as Enterprise Times has commented before). In one sense it offers the possibility to displace blockchain, by delivering via a different mechanism a similar ledger effect.
The success of Ripple with RippleNet is, in one way, surprising. Financial institutions are so often cautious, as the slow acceptance of practical blockchain implementations demonstrate. Maybe ILP has more to offer than many seem to accept.
