Kuwait Central Bank to use Ripple for remittances
San Fransisco firm's 'Internet of Value' global payments network, that promises high speeds and low costs, has expanded to the Persian Gulf
Remittances are big business, especially in Asia and the Middle East. One major drawback at the moment, however, is the high cost and slow speed of micro-payment transfers using traditional banking methods. Kuwait’s central bank seems to have found the answer, and it has come from Ripple.
The San Francisco-based fintech firm has made waves over the past year or two in the traditional banking industry. It has expanded its own network of partners, called RippleNet, to over 100 banks and financial institutions. The latest to sign up for speedier and more cost-efficient transfers is the National Bank of Kuwait (NBK).
According to Arabian Business, the NBK Direct Remit service will be powered by Ripple’s technology but will not utilize its cryptocurrency, XRP. The bank has touted the services as a fast, around-the-clock remittance solution. Deputy CEO Dimities Kokosiolis said the service “is a significant achievement, as it enables our customers to make money transfers within seconds, easily and at their convenience any time of the day.”
Initially, the service will only be made available for transfers to Jordan but it will be expanded to include other countries in the region.
Ripple executive Marcus Treacher said: “We’re excited that they have begun moving live payments across our blockchain network on behalf of their customers. We will continue to work with NBK to connect them to more RippleNet partners so their customers can make quicker, cheaper payments to anywhere in the world.”
Last month the fifth largest bank in Southeast Asia, CIMB, joined RippleNet to take advantage of its competitively low-cost, high-speed transfers. Thailand’s Siam Commercial Bank is also now working closely with Ripple.
RippleNet has been touted as a global payments network which can provide real-time settlement at very low costs. At the moment banks charge anywhere upwards of $25, plus a hefty forex spread, for international transfers making small remittance payments impractical.
According to the company blog, the network of over 100 members is part of Ripple’s “Internet of Value” vision of providing “seamless global transfers”.
While the expansion of the network does not affect use of the company’s native crypto token, new partnerships could influence its price.
In November XRP surpassed Ethereum to become the world’s second largest cryptocurrency by market capitalization. That move, however, looks like it will soon be reversed as Ethereum has recovered better than XRP in recent weeks.