- Ripple, which is known for its blockchain-based cross-border payments services, has said that it will be enhancing its collaboration with the Australian digital banking organisation Novatti Group.
- The two firms signed an agreement late last year – and Novatti will now use Ripple’s On-Demand Liquidity (ODL) service to improve the flow of payments between the Philippines and Australia.
- In a statement, Ripple said that “ODL can instantly bridge currencies, eliminating the need for pre-funded accounts” – and added that Novatti will now be intending to pass several thousand payments a month through the ODL system.
A leading blockchain-based cross-border payments services brand has partnered with digital banking firm Novatti Group to improve remittance transactions in South East Asia.
Ripple said that Novatti, which is based in Australia, will be using its RippleNet On-Demand Liquidity (ODL) function to improve the speed and efficiency of payments transactions between Australia and the Philippines.
This is a key payments corridor in the Asia-Pacific region.
According to figures, the Philippines constitutes one of the most important remittance destinations in the whole of Asia – only China and India receive more.
It comes after the two companies signed an agreement late in 2020.
Novatti is now predicting that it will be pushing many thousands of transactions via the RippleNet system each month.
In a press statement, Ripple explained how its services can benefit institutions like Novatti.
It said that ODL removes the requirement for financial organisations to pre-fund international payments.
Now, Novatti will no longer need to fill a bank account with the relevant local currency in order to offer the transfer service.
This means that the money movement process is fast and cost-effective.
In the statement, Ripple went into more depth about why this causes problems for the financial system.
“Before ODL, remittance providers would need to hold pre-funded accounts on each side of a transaction in that country’s local currency,” it said.
“Those accounts tie up capital all over the world, adding expense to every transaction,” it explained.
“And even with these accounts to facilitate payments, transactions can still take days to fully settle without any visibility into the status of the payment,” it said.
It went on to say that ODL could “bridge currencies” right away to make the process smoother for all participants.
“Using XRP, a digital asset built for payments, ODL can instantly bridge currencies, eliminating the need for pre-funded accounts,” it explained.
“This unlocks capital and reduces operational costs, savings that can be passed on to customers and put to use in more effective ways,” it added.
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