Ripple, the company behind the cryptocurrency XRP, and one of the leading firms in enterprise crypto and blockchain solutions announced recently a new partnership with a payments institution from Singapore known as FOMO Pay. The partnership will allow FOMO Pay to tap into Ripple’s on-demand liquidity service and potentially other crypto-enabled enterprise technologies, aiming to improve the company’s cross-border treasury flows.
What is Ripple’s on-demand liquidity?
Ripple’s On-Demand Liquidity (ODL) service that is offered to FOMO Pay is essentially a service that leverages XRP coins — the company’s native digital asset, built to serve as a bridge between two fiat currencies. By partnering with banks and financial institutions, Ripple takes it upon itself to verify each transaction.
The way things work is rather simple — users pay the money to their bank, and the bank uses Ripple’s network to transport it in the form of XRP to another partnered bank, which once again receives the money in the form of fiat currency. The service is meant to be used by Payment Service Providers and Small-to-Medium enterprises, which manage trapped capital that can be better deployed in order for the companies to grow and scale their businesses.
The problem with traditional treasury payments is that they still suffer from the same issues involving friction as any regular cross-border transaction. This remains the problem in traditional finance because the payments go through the same archaic infrastructure that regular banking relies on. Some estimates even say that around $3.5 billion is spent every year just to address the problems associated with liquidity and treasury.
Ripple’s impact on cross-border payments
Ripple can remove these issues entirely by leveraging ODL for treasury payments. As a result, FOMO Pay will be able to have non-stop coverage, 24/7/365, with constant access to EUR and USD. As a result, it will be able to offer same-day settlements around the world to all of its users.
This will also improve its internal business cash flow, reduce the cost of business, and improve operations. Simply put, they will pay less and operate faster, all thanks to Ripple’s network and its potential. In comparison, any traditional system that uses USD or EUR would take at least one or two business days to do what Ripple’s network can achieve in mere seconds.
FOMO Pay’s founder and CEO, Louis Liu, noted that FOMO Pay is among the leading payment institutions in Singapore. As such, it is its goal to provide its clients with the most efficient and cost-effective payment mode in different currencies. With that being the case, the company is quite excited to team up with Ripple and achieve affordable and instant settlements in EUR and USD on a global scale.
Ripple was the first company to use crypto technology to tackle the challenges involving international payments, and ever since it developed its RippleNet, it has been partnering with banks and financial institutions from all over the world who saw the potential that these systems had to offer.
To learn more visit our Investing in Ripple guide.
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