How Ripple reduces banking transaction costs
One of the reasons why the finance industry continuously embraces the Ripple technology is because it reduces transaction costs and making processes way faster than any conventional banking system.
Ripple uses pre-transaction communication to reduce costs
Over 100 banks including the 10 top banks worldwide have decided to be part of Ripple’s continuous growing network. Financial institutions are starting to migrate to the RippleNet network because of the solution it offers to the decades-old banking problems.
Ripple’s pre-transaction communication capability allows banks to check the validity of all transactions made. Through RippleNet’s secure network, any two transacting banks can both check customer information, all associated transaction fees, and the time it will be completed. The checking process is done before the money is transmitted, enabling banks to avoid failed payments. Through RippleNet network, banks are able to immediately fix any transaction issues because all information is visible to the transacting banks unlike the processes followed by traditional banks.
Before Ripple, banks that send transmit messages to other banks could fail if there’s an error in the information they sent. The sending bank has to resend the transmit message to the receiving bank after making the necessary corrections. Such errors result in additional costs for both banks and prolong the time of sending the money.
Traditional bank payments abroad often take two or more days to settle because they transfer all the funds at the same time in different banks with varying procedures that could lead to more errors.
Financial institution investors and those planning to establish their own payment business should consider partnering with business solution providers that have already migrated to RippleNet in order to deliver money remittance fast, that’s secure and convenient, worldwide. In the future, more banks around the world will have a presence in the RippleNet network.