Most people are aware of how Ripple tries to compete with existing financial institutions. That is a very difficult battle with many hurdles along the way. In the Gulf region, solutions such as Ripple and XRP can make a major difference. More specifically, the poor FX rates and high fees associated with local remittances are a big problem. Especially for expatriates sending money home, things are going from bad to worse. The reliance on SWIFT isn’t helping matters much either.
Regardless of where you live, sending money abroad is expensive. It is far more expensive than it needs to be, in fact. In the Gulf region, remittances are an important aspect of local economies. Unfortunately, those services suffer from expensive fees and poor foreign exchange rates. The middlemen all want their slice of the pie and that situation won’t change anytime soon. Most high volume corridors rely on the SWIFT messaging service. That isn’t uncommon, as the network is a major part of global remittances for quite some time now.
Ripple can Make a big Impact on all Markets
The downside of such legacy systems is how they are sometimes slow and overly expensive. This is not SWIFT’s faults per se, but rather because so many companies and service providers all rely on the same backbone. In Asia, for example, those traditional solutions are circumvented by using APIs instead. It reduces fees and speeds up settlement time. Getting paid in minutes rather than days certainly has its advantages. Unfortunately, APIs are not a scalable solution for the rest of the world. High upfront project costs and months of work need to be justified.
This is where Ripple comes into the picture. It has the technology to facilitate remittance payments in the Gulf region or anywhere else. Their real-time settlement P2P connection through RippleNet is one of the main selling points. Delivery failures are also reduced to near zero while clients are connected. Banks can easily hook into the RippleNet APIs and accommodate both high- and low-volume corridors alike. Moreover, the use of XRP will become a viable option for instant settlement moving forward. It certainly is something to look forward to, that much is evident.
For the time being, it remains to be seen how Ripple can shake up things. The benefits are clear for everyone to see. Moreover, their technology shows how global cross-border payments can be simplified quite a bit. Not everything in life has to be overly expensive just because some people deem it so. There are better and cheaper alternatives available, that much is certain. Once more companies embrace this technology, interesting things will happen. The Gulf region is certainly one region to benefit from these technologies.
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