In a blog titled ‘The Power of Instant Remittances: RippleNet in Japan’, Ripple Labs Inc. explains how it has changed the lives of many Thai workers in Japan through Ripple Net’s global payment network.
According to the 2018 survey, Japan houses more than 1.28 million foreign workers who have come seeking a higher paying job away from the comfort of their homes. Among the 1.28 million, 45,000 of them come from Thailand. Many of the workers are the sole source of income for their families living in other parts of the world. The workers send money to their families on a regular basis.
The survey also revealed that traditional bank transfers can be challenging and can have a huge impact on the daily lives of the workers and their family. Moreover, the survey explained that the transfer fees are high between the originating bank and the intermediary bank. It costs a worker, 50 USD or 6000 Yen to send money.
For several Thai workers, a single remittance fee is equal to 12 hours of hard work, it said. The survey indicates that adding to the high fees, there also exists uncertainties like the beneficiary bank may charge thousand’s of Yen. The workers may be forced to make a second trip to the bank to make up for any shortage in bank fees.
The originating bank in Thailand has no clues as to when the money will reach the family. The transaction can be completed in one day or could take up to to a week, impacting the daily lives of the family, it said.
The Thai families are put in a vulnerable situation when the payment gets delayed, as they depend on the money to pay rent, buy groceries, utilities and more.
Ripple’s survey indicates that the friction between traditional banking systems and the customers have led them to choose Fintech companies that offer a better customer experience.
Ripple stated that it partnered with SBI remit [Japan] and Siam Commercial [Thailand] to eliminate the pain points with its xCurrent cross-border payment technology. It said:
“Today Thai workers can go online to easily open an account with SBI remit to link their existing account from Siam commercial bank, and review SBI’s standard low fee for remittance to Thailand.”
As an option, Ripple said the banks provide the service of disclosing fees within the payment flow. Once the Thai workers receiver their ATM card via e-mail, they can go to the nearest ATM kiosk and make a deposit.
In the back end, Ripple’s xCurrent enables a bi-directional communication between the two banks and validates the customer information, encrypts the payment information once the user inserts the card. The next step involves workers entering the value of the deposit amount.
Explaining in detail, Ripple further stated:
“Ripple’s distributed financial technology excurrent enables real-time settlement of Ledger’s across Siam commercial bank and SBI remits bank. Also, the remitters receive a notification once the funds have been posted to the beneficiary’s account.”
In contrast to an average bank transfer, Ripple helps transfer money within minutes with lowered remittance fees.
Praising SBI and Siam commercial bank, Ripple said:
“Siam commercial bank and SBI remit have not only reinvented the remittance experience from Japan to Thailand, they have also created new opportunities for their institutions.”
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SendFriend goes live in New Jersey; prepared to take on a $11 billion remittance corridor with Ripple
SendFriend, a next-generation remittance service that focuses on cross-border payments between the U.S. and the Philippines, today announced that it had gone live in the state of New Jersey, via a Twitter announcement.
We’re all excited for our launch, and today is the Day (for New Jersey)! Join thousands of Filipinos and come out to the Philippine American Friendship Committee Parade and check out our booth – We will be here all day! pic.twitter.com/PkcrGChwZ9
— SendFriend (@sendfriendinc) June 23, 2019
Ripple and SendFriend’s partnership was announced in late 2018, with the CEO of the latter, David Lighton, expressing his excitement at a Barclays Event in 2019. At the same event, Lighton also confirmed that SendFriend would be using Ripple’s xRapid payment solution that leverages XRP as a liquidity provider.
There is approximately $11.09 billion transferred between the U.S. and the Philippines in remittances every year. These largely use traditional payment methods that are slow and less efficient, when compared to newly developed blockchain-based solutions. The chart below shows the flow of remittances into the Philippines, with the U.S. accounting for the highest volume.
By using Ripple’s xRapid payment solution, money can easily be transferred in a few seconds. Not only does this save millions in fees by taking away middlemen, but it is also less time consuming.
Although xRapid has slashed fees and time for cross-border payments drastically, it has not gained traction due to a lack of regulatory clarity around cryptocurrencies. On February 11, 2019, SendFriend had announced the provision of an option for Overseas Filipino Workers [OFW] to send money “securely and reliably” across borders, with fees that are “65% lower than the industry average” in one “seamless flow.”
David Lighton had said,
“We are humbled by the support of our investors, who share in our vision to reduce the costs and improve the experience for the millions of Overseas Filipino Workers (OFWs) who send money home to support their families… This investment will allow us to build out our team, focus on community engagement, and marketing efforts.”
A Twitter user @mister_pace, commented,
“Based on these rates. You save about $13 to send 1000 using SendFriend over The next lowest MoneyGram”
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