Ripple: Why are real-time cross-border payments ready for a breakthrough?

Ripple Vice President Markus Treicher explained why real-time cross-border payments are ready for a breakthrough.

Markus Treicher, Vice President of Ripple, explained why real-time cross-border payments are ready for a breakthrough. The material was presented on the official website of Ripple.

First of all, the Vice President of Ripple noted:
If the COVID-19 pandemic has taught us one thing about payments, it is that speed, reliability, and access to money on demand are critical in a world based on digital interaction. Our world may change forever, but this change makes it possible to optimize more efficient ways to perform everyday life tasks, including payments.

Given the current economic situation, we recently stated that real-time instant payments are now more important than ever. And there is a logical continuation of this view, based on the growing need and demand for affordable and immediate cross-border payments.

The main thing, according to a representative of Ripple, is to eliminate the shortcomings of the current ecosystem of cross-border payments:

Addressing the glaring shortcomings of the current ecosystem of cross-border payments is a challenge that must be overcome. Currently blocked by outdated systems and the lack of universal protocols and rules, cross-border payments are much more burdensome for the end user than they should be.

Further, the Vice President of Ripple noted:

Fortunately, this wave seems to be changing. Powerful new technologies based on blockchain and augmented with digital assets are catalyzing dramatic changes in the way money moves around the world, with the potential to open up huge benefits for both individuals and businesses as societies around the world continue to digitize.

After that, the representative of Ripple briefly spoke about the situation at the moment with cross-border payments:

If you have ever had to send money abroad, you are well aware of how unpleasant this process can be. To say that the existing cross-border payment infrastructure is broken would be an understatement. This is a very slow and expensive process, and you often don't even know if the money will come or when. This is in stark contrast to the digital services that we now not only expect, but rely on more than ever.

Sending global cross-border payments should be simple, seamless, immediate, and cost-effective. However, the underlying systems, protocols, and liquidity management models that underpin cross-border payments are complex, limited, and fragmented.

This means costly delays and high transfer fees for the end user. Addressing these issues is important for people and businesses around the world, and especially important for payment flows to low-and middle-income countries like Mexico, which will benefit most from instant and low-cost payments.

Countries and financial networks that adhere to different standards are one of the main factors that create this fragmented environment. As a result, there are hundreds of closed networks that do not interact with each other, are poorly interconnected through unstructured payment messages that require significant manual intervention – all this contributes to a poor payment experience.

According to Markus Treicher, you can solve the problems of cross-border payments using RippleNet and ISO:

To combat this, the international organization for standardization (ISO) has established ISO 20022 as a universal standard for harmonizing legacy payment infrastructures, but without a fundamental overhaul of these payment infrastructures, ISO standardization can go so far. To truly change the paradigm and create the kind of cross-border payment services that people and businesses need, modern technologies must be applied to the problem of payments to complement the achievements of ISO standards. Ripple's vision is to achieve this technological transformation by creating a new global payment network called RippleNet, based on distributed Ledger technology and closely linked to ISO standards.

Consequently, Ripple has been a leading proponent of ISO 20022 and its mission to provide better global compatibility and improved customer service when making payments. As the de facto global data standard for modern payment messaging between financial institutions and payment systems, ISO 20022 is currently adopted in 70 countries. It is estimated that 87% of global financial transactions will be supported by ISO 20022 by 2023. This common language helps financial institutions, banks, and payment systems simplify the processing of cross-border payments, as well as strengthen regulatory controls.

With the increased use of ISO 20022, combined with the fresh approach made possible with ripplenet distributed Ledger technology, we can better determine the future of international payments. Banks and financial institutions joining RippleNet accelerate the adoption of ISO20022 standards and help introduce cross-border payment methods to the modern world, providing a truly hassle-free experience for money transfer senders, small businesses, and emerging digital markets around the world.