Fintech eases fund transfer between Philippines and Australia

MANILA, Philippines — Global payment solutions provider Ripple through a partnership with Melbourne-based Novatti Group is helping Filipino-owned iRemit Inc. process remittances between Australia and the Philippines.

Under the partnership, the Novatti Group would tap RippleNet’s on-demand liquidity (ODL) service leveraging the digital asset XRP for instant, cross-border payments.

The partnership initially focuses on remittances between Australia and the Philippines through iRemit.

RippleNet enables hundreds of financial institutions across more than 55 countries to streamline global payments, expand into new markets and provide the best customer payments experience today.

The Philippines is the third largest remittance receiving country in Asia after India and China, with Filipino workers abroad sending home $33.19 billion in 2020, only 0.8 percent lower than the record high $33.47 billion in 2019 despite the impact of the pandemic.

However, the time and expense required to send remittances to the Philippines diminishes the impact of these funds, which are often the main source of disposable income for Filipino families.

The Bangko Sentral ng Pilipinas (BSP) sees personal and cash remittances rising by four percent to hit record high this year. Personal remittances rose by 1.6 percent to $5.65 billion, while cash remittances went up by 1.5 percent to $5.08 billion in January and February this year.

The current global payments infrastructure does not meet today’s business or consumer demands.

Cross-border payments require businesses to hold pre-funded accounts in destination currencies — a costly and slow endeavor that ties up resources — leaving remitters with limited options.

Announced recently as part of a deal originally signed in December, the digital banking and fintech company that specializes in delivering unique payment solutions is deploying RippleNet to make moving money faster, cheaper and more reliable for their customers.

Novatti expects to process several thousand transactions a month through RippleNet. It also planning to quickly scale the service to more fintech customers and other countries in Southeast Asia.

The partnership enables instant cross-border payments without the need for pre-funding. Before ODL, remittance providers would need to hold pre-funded accounts on each side of a transaction in that country’s local currency.