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A major UAE forex and remittance house is in the process of partnering FinTech firm Ripple for real-time cross border payments using blockchain technology.
A report by regional publication Arabian Business has revealed that UAE Exchange, one of the region’s earliest remittance operators with some 800 offices across 31 countries, is looking to partner San Francisco-based FinTech firm Ripple to facilitate instant international money transfers.
The remittance operator sees blockchain technology as the solution toward faster and efficient money transfers at significantly lower costs for customers. Ripple uses its bank-friendly public blockchain, the Ripple Consensus Ledger, to link its international partners and facilitate real-time money transfers globally.
“UAE Exchange has been investing significantly in blockchain technology,” revealed UAE Exchange Group CEO Promoth Manghat.
The executive added:
[We] are in the process of tying up [a deal] with distributed ledger startup Ripple, for real-time cross border payments.
Based in Abu Dhabi, the remittance operator has already witnessed the National Bank of Abu Dhabi – the emirate’s largest bank – launching blockchain cross-border payments by integrating Ripple’s technology. The bank has a marked presence in the Middle-East and Asia corridor with operations in Malaysia, China, South Korea, Hong Kong and more recently, India – the largest remittance receiver in the world.
“Banks and their customers have been hearing about the promise of blockchain technology to enable real-time cross-border payments,” said Ripple CEO Brad Garlinghouse after the bank’s commercial launch of blockchain payments in February. “Now…banks like NBAD are making this a reality by offering Ripple-enabled payments to their entire customer base.”
Meanwhile, the UAE Exchange Group has also invested in blockchain loyalty network Loyyal and is also a member of Bankchain, India’s largest banking blockchain consortium which took shape in February this year.
Bitcoin: The Remittance Industry’s Future
The Arabian Business report concludes with a market expert pointing to bitcoin as the future of the remittance industry. Dubai-based Jameel Ahmad, VP of corporate development and marketresearch at trading broker FXTM stated:
Adopting bitcoin for remittance and forex business is where the industry is heading.
Traditional bank remittance, through SWIFT, typically costs 6% in remittance fees and could take up to 3-4 days for settlement. The likes of PayPal and other modern remittance operators like Western Union can charge up to 4% in fees, with faster transfers. However, a bitcoin-based remittance agency can guarantee same-day transfers with 1% of the transaction fees or less.
The big remittance operators like Western Union and Money Gram along with other smaller players, he added, directly facilitate 25% of the world’s annual remittance transactions. The trading executive sees bitcoin streamlining what is otherwise an exhaustive, multi-step process for an international money transfer. As reported earlier, South Korean FinTech remittance firms that mediate money transfers with bitcoin will now gain official permits to operate as money transfer operators.
UAE Dirhams image from Shutterstock.