Blockchain technology provider Ripple has announced the launch of a new tool, designed specifically to help banks understand their cross-border payment cost structure and how it can help them overcome current inefficiencies.
The new cost model will enable banks to enter transaction volume and operational metrics to receive a custom cost analysis. Ripple explained that that the cost analysis breaks down cost to a per-payment level, for both a bank’s current system and if it were to use Ripple. The solution is designed to lower total cost of settlement, enabling banks to transact directly and with real-time certainty of settlement.
Ripple said that the analysis includes a cost structure that shows the bank’s transactional volume and metrics compared to global averages. Cost breakdown across payment processing, treasury and reconciliation is also shown with the bank’s current provider and what it would be with Ripple. This will help banks to easily estimate the efficiency gains it could achieve using Ripple for international payments.
“By upgrading existing infrastructure, Ripple increases end-to-end processing efficiencies and can ultimately allow banks to make new business models economically viable through lower costs. But how much? We estimate close to 60% cost savings for an average payment size of $500”, Ripple said. “Ultimately, the cost savings only tell half the story - the real benefit of Ripple is derived from the high quality transaction products and services that enable banks to service new customers, new use cases and new markets.”
