According to a September 28thblog from Ripple, the Siam Commercial Bank (SCB) will be the first to use RippleNet’s “multi-hop” feature.
This will allow the bank to settle frictionless payments on behalf of other financial entities in Ripple’s enterprise blockchain network.
Ripple says the multi-hop feature gives the SCB the ability to:
“Receive and forward on a payment without a bilateral relationship between the originator and beneficiary institutions.”
The blog post notes how countries in the Association of South Eastern Asian Nations (ASEAN) have been plagued by inefficiencies and high fees when it comes to cross-border payments.
Countries in the region often have to first convert a payment to USD in order to settle across correspondent banks, and then change the currency again into what is used at the beneficiary entity.
Thanks to multi-hop, Ripple says financial institutions can connect right to the SCB to carry out regional transactions without having to convert currency multiple times.
According to Ripple, the multi-hop feature will also ensure the customers of businesses associated with RippleNet will have payments completed in a more transparent manner, and close faster with lower fees.
For more than a year, Ripple has been working on expanding their RippleNet enterprise blockchain network, with an overall goal to enable near real-time settlements and clearings of international transactions.
In September 2017, Ripple opened up offices in India, the globe’s largest remittance receiver, and Singapore, a leading Asian financial hotspot.
Early in September, CCN.com reported how PNC Bank agreed to join the RippleNet consortium. PNC currently stands as the 9th largest U.S. bank by assets. The addition was heralded as a big step for Ripple as they continue to expand their global payments network.
So far, RippleNet is comprised of more than 100 financial institutions, who include banks, payment providers, and remittance forwarders. On September 18th, the National Commercial Bank of Saudi Arabia agreed to join RippleNet. The move was also seen as a big win for Ripple since Saudi Arabia is one of the globe’s biggest remittance sources.
Remitters, along with small and medium enterprises (SMEs) are said to be two of the biggest benefactors of RippleNet’s network. Ripple writes in the September 28th post how these two entities usually have “little to no support” for their low-value payments with traditional cross-border payment practices.
As a result, the ability to carry out cheap, secure global transactions in real time as customers of RippleNet institutions is said to a big advantage for SMEs and remitters.
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Last modified: June 3, 2020 9:42 AM UTC