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Ripple SEA Exec on PayID, Remittances, and Central Bank Digital Currencies

We talked to Ripple Southeast Asia head about PayID and his thoughts on remittances, interoperability, and central bank digital currencies.

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Last month, we had an email interview with Kelvin Lee, Head of Southeast Asia at Ripple to discuss its PayID, his insights for the Philippines, as well as what he thinks are the benefits of PayID versus other similar initiatives.

About PayID:

PayID is a universal payment ID that simplifies the process of sending and receiving money globally across any payment network and any currency. Gopay, Ripple, Blockchain.com, Bitpay, Brave, MercyCorps and others have collaborated on the development of PayID through the Open Payments Coalition, a multinational alliance of industry leaders. PayID aims to improve user experience around ID across all payment networks and provide easier entry points for new technologies and new businesses via openstandards/networks.

On the Lack of Notable Partners like PayPal or Square

BitPinas: I notice the lack of what many consider as key platforms – like Paypal or Square. Are you in discussions with them or planning to include them in the future? How about banks?And what could be their incentive for joining PayID?

Kelvin Lee: At launch, the Open Payments Coalition (OPC) brought together 40+ partners from the finance,tech and nonprofit sectors, collectively reaching more than 100 million consumers. While we are excited about ​Sygnum​ being a founding member of the OPC to launch PayID , we are equally excited about the companies — whether traditional financial services to fintech applications, crypto and everything in between — that we know will join soon.

Today, there are hundreds of payment networks and platforms, but services are siloed. For example, Coins.ph users in the Philippines can’t even send money to a DeeMoney account in Thailand, limiting payments to users within a single network. To prevent payments from becoming further siloed and fragmented, the industry needs an open payments network that works for all –and fast, or else the financial services industry risks falling behind to the likes of Google, Apple and others, who already have the potential to connect the masses through payments — but are closed networks.

As an open standard, PayID will be an important step towards building the future of an open payments network, in the Southeast Asia region and around the world. ​As a universal protocol for payments, PayID will effectively reduce friction between disparate financial networks, wallets and payment processes that makes sending and receiving money difficult.

In enabling payments to work like email where a user has a simple, single address that works across any payment network or any currency — be it fiat or digital — PayID creates a free and open common standard for interoperability between payment networks, making it easy for anyone to send money to and from other participating PayID partner networks. For businesses, this means being able to offer their customers a single ID that works across any payment network,thereby increasing their reach to more wallets, currencies and payment platforms

On the Similarities with Libra

It seems like PayID is something the Libra project originally aimed to do, minus the Libra token. How do you differentiate yourself from Libra as well as to other “coalitions” that all want to serve the unbanked and promote financial inclusion for all?

While several solutions to these pain points in payments exist today, the world has yet to settle on a single standard for sending and receiving money. As mentioned earlier, companies with closed networks such as Google, Apple and others have a head start — yet, for every other company and developer to use these networks, there are terms and fees they must accept.

PayID is not just a whitepaper and is live today. While it’s still early stages since launch, millions of users can use it today and 100 million consumers will be able to use it soon. As a free and open standard, any company can use PayID without asking the OPC’s or anyone’s permission and there is no minimum financial investment like Libra’s $10 million prerequisite.

PayID leverages the same web technology and security standards that secures ecommerce and online banking today. Additionally, setting up a PayID server is not only secure, it’s easy. PayID is designed for developers by developers, which means any organization that sends or receives money can integrate a PayID server into their existing web infrastructure and start using PayID in just a few lines of code. A reference implementation of the server is available on GitHub and is fully free to use, along with a variety of tools to make it easy to manage the server after deployment.

PayID was built specifically to help companies comply with FinCEN and FATF requirements. This means that it can also be incorporated by banks,​ digital wallet providers, remittance services, and payment providers or processors, unlike other coalitions.

PayID was conceived as a universal solution for all organisations to send and receive money, regardless of their location, payment network and currency. Through PayID, our goal is to bring the world one step closer to a future where money moves as easily as information.

On Ripple’s ODL Service

How is the ODL service going to work/be integrated with PayID? Will ODL clients be able to integrate PayID easily?

It’s important to note that PayID is not a Ripple initiative but something that is jointly developed by the 40+ launch partners in the Open Payments Coalition (OPC), and benefits any company that needs to send or receive money.

With Ripple being one of the founding members of the OPC, PayID fits into our Internet of Value vision — where money moves as easily as information. Ripple will be supporting PayID in RippleNet, and Ripple’s developer arm, Xpring, will support companies who want to integrate PayID in their products. Some of Ripple’s customers are also part of the OPC, and will be adopting PayID within their services in the near future.

On PayID’s Suitability in the Philippines

Why do you think PayID is suitable for a country like the Philippines?

With the Philippines being one of the biggest remittance receiver countries across the globe, PayID is a simple and hassle-free solution for Overseas Foreign Workers (OFW) to send money home. As more OFWs discover more convenient and faster services, and cheaper ways to send money home, this habit will become permanent as PayID’s solution facilitates these cross-border payments in near real-time — for both senders and receivers.

Generally, while the Philippines has been embracing e-payments and online transactions since 2018, the recent Enhanced Community Quarantine (ECQ) measures have definitely increased demand for e-payments. Even as ECQ measures are lifted in the future, this ​trend is expected to continue​. However, the current payment process is slow and inefficient, and there is a need for a standardised solution. The COVID-19 pandemic has created a unique opportunity to accelerate and sustain the shift to digital payments, and PayID aims to facilitate this by breaking down silos in the payment process, unifying a fragmented payments network.

On Central Bank Digital Currencies

Some countries are investigating whether or not to launch Central Bank Digital Currencies. Do you think this will have a positive or negative effect on the PayID initiative?

CBDCs are exciting and we applaud the central banks for pursuing this research. While CBDCs are still in the research stage with many unanswered questions, we are encouraged by such initiatives as the potential is huge.

PayID’s potential to unite the many closed payment networks that exist today is huge as well. It can be adopted at the national level, and PayIDs can be assigned to individuals the same way a national ID number would — but that ID is instead used solely for payments. PayID can also be used for either fiat currencies or digital assets, which include CBDCs.

On Additional Fees

Will the user be imposed additional fees because the payment platform of their choice will use PayID?

PayID is a universal payment identifier that uses a simple, open standard to help individuals easily send and receive money. PayID does this by creating a free and open common standard for interoperability between payments networks.

You can think of PayID as enabling payments to work like email, ​by replacing complicated account numbers or wallet addresses, with names that are easy to read and remember. With PayID, ​a user has a simple, single address that works across any payment network or any currency — whether fiat or digital. It could be as simple as — for example, Kelvin$unionbankph.com sending money to Michael$BDO.com.

Like email addresses, PayID abstracts underlying rail details from users — whether sending crypto or fiat — to simplify the process of sending and receiving money today. This is important because while there are currently a variety of identifiers being used for payments –including email, biometric IDs, national IDs and phone numbers. They however contain information that is either too confidential to be used for payments (biometric IDs), or are prone to cybersecurity risks/phishing (emails). Therefore, it is crucial for a universal ID to be created solely for payments.

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