We can all agree with the fact that Ripple is highly recognized as a cross-border payment solution for financial institutions from all around the world, a field in which the company has been putting the most significant efforts to become the leader of the remittance services at a worldwide level.
In this sense, Ripple has managed to build several relationships of extreme importance with some of the most reputed institutions in the financial landscape such as Banco de Santander, American Express, Western Union, and others. However, the path is long, and still, there’s so much to make for Ripple to achieve its vision.
With relation to this, on September 13th the company made an important announcement that may bring it closer to its goal.
A strategic alliance has been sealed with nothing but the National Commercial Bank (NCB) of the Kingdom Saudi Arabia (KSA), one of the biggest markets for remittance services in the whole world. Let’s take a look at all of the details of the integration of the NCB to the Ripple net and how will this boost the company towards succeeding on its vision.
A big remittance market
As mentioned above the Kingdom Saudi Arabia remittance market is one of the biggest around the world, so the latest partnership represents an incredible win for Ripple that now is getting closer to conquer the sector.
According to data obtained from the world bank, 308 million dollars entered the country, and 37 billion dollars were sent outside in remittances just in the year of 2016; so we can have an idea of how big the market is and the heights that it could have at the moment.
About this, the main reason for the incredibly high flux of remittances being sent outside the country is that the KSA is one of the most significant labor markets in the world, meaning millions of people from different parts of the planet work there and send money back home to their families.
Just in 2017, 11 million workers from more than 100 different countries and regions were working in the KSA and using domestic financial services to send their money home. In this sense, Ripple states that “both large corporates and small to medium enterprises (SMEs) are responsible for significant payment volume.”
The NCB is the largest financial institution in the middle east to manage digital assets, the organization was founded back in 1953 and operates 512 branches across the KSA with more than 3 million customers.
The partnership with Ripple comes after the conclusion of a pilot programme developed by the Saudi Arabian Monetary Authority (SAMA) which signed an agreement back in February with Ripple, specifically for the xCurrent solution that the company offers.
The agreement was to “help banks in the KSA improve their payments infrastructure using xCurrent.” In this sense, the product would be used “to instantly settle payments sent into and out of the country, with greater transparency and lower costs.”
In relation to this, the Ripple’s Infrastructure Innovation Global Head, Dilip Rao, stated that,
“Central banks around the world are leaning into blockchain technology in recognition of how it can transform cross-border payments, resulting in lower barriers to trade and commerce for both corporates and consumers. SAMA is leading the charge as the first central bank to provide resources to domestic banks that want to enable instant payments using Ripple’s innovative blockchain solution.”
The National Commercial Bank of the KSA will start to function on the Ripple net at the end of the fourth quarter of the year, a moment in which it will be able to make transactions with a bunch of other institutions already transacting on the Ripple net.
The partnership will allow NCB users to enjoy faster, more transparent, and cheaper cross-border payment transactions. The first connections will be with financial institutions in North America and Asia, starting with Singapore for the latter one.
Without any doubt, this represents a massive step for Ripple in the domination path of the remittance sector. Even though the Ripple NCB partnership is still in the testing phase, but as things look, we call be sure that by the end of the year we will hear about the milestones of the partnership. And luckily for XRP fans, this might influence as well the price of the XRP token. So stay tuned.
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