In a blog titled ‘The Power of Instant Remittances: RippleNet in Japan’, Ripple Labs Inc. explains how it has changed the lives of many Thai workers in Japan through Ripple Net’s global payment network.
According to the 2018 survey, Japan houses more than 1.28 million foreign workers who have come seeking a higher paying job away from the comfort of their homes. Among the 1.28 million, 45,000 of them come from Thailand. Many of the workers are the sole source of income for their families living in other parts of the world. The workers send money to their families on a regular basis.
The survey also revealed that traditional bank transfers can be challenging and can have a huge impact on the daily lives of the workers and their family. Moreover, the survey explained that the transfer fees are high between the originating bank and the intermediary bank. It costs a worker, 50 USD or 6000 Yen to send money.
For several Thai workers, a single remittance fee is equal to 12 hours of hard work, it said. The survey indicates that adding to the high fees, there also exists uncertainties like the beneficiary bank may charge thousand’s of Yen. The workers may be forced to make a second trip to the bank to make up for any shortage in bank fees.
The originating bank in Thailand has no clues as to when the money will reach the family. The transaction can be completed in one day or could take up to to a week, impacting the daily lives of the family, it said.
The Thai families are put in a vulnerable situation when the payment gets delayed, as they depend on the money to pay rent, buy groceries, utilities and more.
Ripple’s survey indicates that the friction between traditional banking systems and the customers have led them to choose Fintech companies that offer a better customer experience.
Ripple stated that it partnered with SBI remit [Japan] and Siam Commercial [Thailand] to eliminate the pain points with its xCurrent cross-border payment technology. It said:
“Today Thai workers can go online to easily open an account with SBI remit to link their existing account from Siam commercial bank, and review SBI’s standard low fee for remittance to Thailand.”
As an option, Ripple said the banks provide the service of disclosing fees within the payment flow. Once the Thai workers receiver their ATM card via e-mail, they can go to the nearest ATM kiosk and make a deposit.
In the back end, Ripple’s xCurrent enables a bi-directional communication between the two banks and validates the customer information, encrypts the payment information once the user inserts the card. The next step involves workers entering the value of the deposit amount.
Explaining in detail, Ripple further stated:
“Ripple’s distributed financial technology excurrent enables real-time settlement of Ledger’s across Siam commercial bank and SBI remits bank. Also, the remitters receive a notification once the funds have been posted to the beneficiary’s account.”
In contrast to an average bank transfer, Ripple helps transfer money within minutes with lowered remittance fees.
Praising SBI and Siam commercial bank, Ripple said:
“Siam commercial bank and SBI remit have not only reinvented the remittance experience from Japan to Thailand, they have also created new opportunities for their institutions.”