Ripple, the enterprise crypto and blockchain solution provider, is expanding its presence in Dubai by opening a new office location in the Dubai International Financial Centre (DIFC); citing the region’s innovation-forward regulations, expansive network and growing reputation as a leading global financial centre.
To find out more about the future plans and aspirations of Ripple, The Fintech Times spoke to its managing director in MENA and South Asia, Navin Gupta about expansion in the region, cross-border payments and financial inclusion.
Ripple has long focused on serving customers around the world with over 90 per cent of its business coming from outside the US. The MENA region has become a key market for the company – with it revealing that around 20 per cent of all RippleNet customers, such as SABB, Qatar National Bank, Lulu Financial Holdings, Al-Ansari Exchange, and RAK Bank, are based there.
Navin Gupta explained exactly why the Middle East market represents a unique opportunity for Ripple to move into: “For the whole remittance market, we realised that there is no place like the Middle East as a region. For example, it has multiple times more remittances being set up than the United States. So for us said, it makes sense.
“Secondly, we found it was very progressive in terms of regulation, even when the regulations weren’t in place. We approached the authorities who explained we could go ahead and they would work hand in hand with us to put the regulations in place’. So we found a lot of openness with a very large commercial opportunity, so it was very natural for us to put our roots here”.
Ripple is testing its ideas in Dubai thanks to forward-thinking regulation
Gupta further explained how the regulators in Dubai are fostering innovation in and around the region: “Firstly, we are here in Dubai for expansion, but we are also looking to bring some of our early products here as well. We are an American company. Lots of early innovations happened in the US, but I think everything will start moving in a more decentralised way around the world. In the UAE there are a lot of market leaders and one of the reasons for that is the progressive regulation here.
“If we are able to go to the regulator and explain that an idea is not ‘fully baked’ but show them how we are thinking about it. We can then ask if we can work hand in hand to launch it in the market. If yes, then it’s a great market for us to build everything from there.”
Over half of Ripple’s MENA payment volume currently consists of cross-border payments such as remittances from the UAE, Bahrain and Saudi Arabia to India.
Gupta explained how working in the remittance space has given Ripple a platform to work on other areas in cross-border payments: “Remittance as a use case has already given us a foot in the door: institutional engagement with banks, PSPs and our client base because we are an enterprise company, it makes it easier for them to have a much deeper discussion with us. We are because we are already a trusted partner in one area of business”.
‘Building towards the endgame: making cost per payment almost negligible’
Discussing Ripple’s aims, Gupta likened the future of cross-border payments to how email revolutionised sending information globally:
“We have a very simple and clear direction in our mind. We want cross-border payments to be exactly like email. The example I want to give is, in the past, we would have to send letters from the UK to the likes of Australia – which would take seven days, and it would cost a lot more for postage – but then came email. You could be sitting next to someone and send them an email that they would receive almost at the exact same time, and this would be the same for someone hundreds of miles away from you.
“In our view, cross-border payments are moving in that way. Technically, today we could offer a payments subscription model which costs $29.99 and lets consumers send as many payments worldwide as they need to.
“What we need to do is to keep building towards that endgame; in which where you would see the total number of payments skyrocketing, but the actual cost per payment will almost become negligible. It will be exactly like email: simply moving data from A to B.”
Financial inclusion is ‘all about building a commercial model’
Gupta also talked about the future of financial inclusion. He explained how, if the cost of payments successfully is reduced enough worldwide, the positive impact this could have on financial inclusion could be significant:
“In my mind, financial inclusion is very, very simple. It’s all about building a commercial model – not not-for-profit models because eventually, those things don’t work. If you want this to work at scale, it has to be a commercial model, which works both for the buyer and supplier, in the localised contexts for the receiver.
“The easiest way I can explain it is using microinsurance as an example. Normally, when people buy insurance, they choose coverage for a one-year period. But maybe there’s a daily wage earner, that wants to buy the insurance on a one-day basis. And again, then the payment collection comes in because sometimes you can sell that microinsurance to them through an electronic channel without it becoming overly costly on their end”.