Alternative Finances

Ripple Brings Real Time Payments To The U.S.

Payment network Ripple Labs just snagged is to U.S. banks closer to its goal of frictionless payments worldwide.  CBW Bank and Cross River Bank, based in Kansas and New Jersey respectively, will be using Ripple to making global money transfers and payments. Ripple’s first partnership for the international money transfer service was with a German bank in May.

International money transfers can be an issue for small banks that do not have a large network of international deposits  and thus must rely on a larger partner that does.

“That bank is going to charge the small bank fees for that. It’s also going to determine the exchange rate for dollar to euro. They’ll say this is the dollar to euro rate and they’ll charge 5% on a dollar-euro exchange rate,” said Ripple CEO Chris Larsen, reports Venture Beat. Larsen went on to point out that the small bank on top of expense faces uncertainty as it doesn’t always know where the money is when it is en route.

By contrast, the Ripple protocol allows for same day transfers with better exchange rate.

Ripple is based of of XRP — a similar idea to Bitcoin’s BTC. The difference, Larsen told VentureBeat, is that Ripple allows an other currency into the protocol–like euros or dollars and acts a ferry between banks and traders and then from traders to wherever the funds final destination is.

Ripple is also less valuable then bitcoin–with only a value of about half a penny. However that could easily changes, notes Larsen, if the platform gets more use.

Ripple’s international expansion is continuing and the company is now looking to small banks in China, Japan and to bring more traders into its network.


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.

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