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Ripple announced the first live implementation of its On-Demand Liquidity (ODL) service that will be used to facilitate cross-border transactions between Japan and the Philippines. Japan’s SBI Remit and the Philippines’ will use ODL to leverage the digital asset XRP to eliminate pre-funding and other operational costs by both parties. 

The typical remittance activity involves pre-funding on both sides to cover the cost of the money transfer. When a person from the city sends money to someone in the province, the recipient can immediately cash out the money if they go to the remittance outlet’s provincial branch because that branch is already pre-funded. This entails more cost, including the need for security. The fee for this type of transaction could go higher especially if it’s a cross border transaction. (Read More: Ripple’s ODL to Aid iRemit Process Australia-Philippines Remittances)

Using Ripple’s ODL platform, SBI Remit could send the money to the Philippines using the digital asset XRP. “With ODL now available in Japan, RippleNet customers can leverage the digital asset XRP to eliminate free-funding and reduce operational costs, unlocking capital and fuel the expansion of their payments businesses,” Ripple said in a statement.

Nauman Mustafa, CEO of says the collaboration is a fintech innovation that is key to achieving quicker and more secure financial transactions. “With the support of SBI Remit and Ripple, we look forward to enabling greater customer experiences by bringing faster and cheaper cross-border payments between Japan and the Philippines, taking a step closer towards revolutionizing the financial system.” (Read More: Announces 3 New Tokens on Its Platform)

Filipinos are the third largest group of foreigners in Japan, and remittances from Japan to the Philippines totaled around $1.8 billion in 2020, the pandemic year. The World Bank estimates that the average cost of remittances coming from Japan is 10.5%, higher than the average costs from other G8 countries (5.92%). A quick calculation shows a JPY 490 fee when sending roughly Php 10,000 worth of JPY from Japan to the Philippines with the recipient receiving the cash via pick-up. The recipient would also lose around Php 100 from the outlet’s own exchange rate that is slightly different from the prevailing global rate

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Driven by an expected increase in low-value yet high frequency transactions from Filipinos in Japan, SBI said it sees the potential in utilizing blockchain technology to transfer how payment transactions are made and how to unlock trapped capital. “The launch of ODL in Japan is just the start, and we look forward to continuing to push into the next frontier of financial innovation,” Nobuo Ando, Representative Director of SBI Remit said in a statement. 

This article is published on Partners with SBI Remit to Utilize Ripple’s XRP for PH-Japan Remittances

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