The Ripple project has gained a good reputation all over the world especially in Japan following the formation of SBI Ripple Japanese bank. Over 60 banks have joined the project while the number was only at 15 back in 2016.
This collaboration has been in existence for a couple of years and the teams are already making progress in the ‘MoneyTap app’ product. This app was announced back in Q1 but its website became functional two days ago.
As it stands, users cannot download the app but it is set to be available between September and November 2018. Ripple and its consortium will be making a big move into the unbanked market in today’s growing Fin Tech arena.
During the pioneer phase of this ‘MoneyTapp app’ project, only three banks within Ripple’s consortium will access the services live. The three include; Resona Bank, Suruga Bank & Sumishin Bank.
If this goes as planned, Ripple will be a big market maker for the international payments arena given the growing trade alliances and remittances sent across borders. This will be tested within Japan’s jurisdiction at the beginning, a deep market for cross-border transfers.
Ripple’s Efficiency and the SWIFT niche
SWIFT cannot be fully relied on when it comes to sending money internationally; the platform is friendly to large amounts as opposed to consumer amounts. As a result, many manual workers sending money abroad via SWIFT have to work 12 hours to raise the amount required for commission. However, this amount can be a bit tricky to estimate due to the varying international rates. Transport costs to and from the financial intermediaries also affects the final sum collected by a significant amount.
This is why Ripple’s MoneyTap initiative is a good solution for both the institutions and workers sending remittances home. Its aim is to cut the costs involved and making it possible for 24 hours money transfers across the world, a concept that is not far from actualization.
Not only Ripple’s Consortium is pushing to displace SWIFT’s market position in Japan. Other players have tried to match the efforts being made by the member banks within the SBI Ripple Japanese bank but none is yet to qualify as a threat.
The likes of Western Union are Ripple’s current competitors as they also offer reasonable fees for cross-border transfers. However, they lack the new tech wave design within its infrastructure, Ripple’s blockchain and token competitive edge has made the project an industry favorite. Furthermore, the friendly fees charged by Ripple cannot be easily matched by its competitors.
It is not the first time SWIFT is about be replaced in Japan, back in 2016 the largest Japanese bank ‘MUFG’ had partnered with Coinbase to develop an alternative. This is still a work in progress and MUFG has since proceeded to join the Ripple Consortium in Japan. Coinbase on the other hand is yet to list Ripple, probably because of the project’s vision to offer Ripple’s services in a better way soon.
SWIFT is not completely lacking within the development space despite its current lion share within the market. The company is working on its own blockchain platform to remain in the game during the Fin Tech era. However, this may not be the best idea given that upon completion, all the bank partners working with SWIFT would have to make fresh integrations for P2P communication.
The international payments market unfair fee charges is an issue within many regions of the world apart from Asia. Today, remittances to Sub-Saharan countries are heavily charged but continue to fuel a large part of these economies.