Remittance payments are part of many foreign workers’ daily lives; however, traditional systems can be slow and costly. In Japan, there are approximately 45,000 Thai employees working around the clock to send money home to their families–and Ripple’s solution RippleNet is aiming to make the process easier.
RippleNet, a decentralized global network for banks and payment providers, teamed up with SBI Remit and the Siam Commerical Bank to allow real-time remittance payments, enabling Thai workers to send money home in minutes as opposed to days.
An article published in 2004 noted the importance of remittance payments for foreign workers in Japan. At the time, Inter-American Development Bank President Enrique V. Iglesias told reporters:
“Japan is an important source of remittances. It is a major, major source of income. We’d like now to study how to make remittances more productive.”
Nearly 15 years later, it appears there may finally be a solution.
The Current System Is Flawed, to Say the Least
The remittance payments industry is enormous. According to estimates made by the World Bank in 2017, migrants sent $450 billion to their families in developing countries. However, analysts believe approximately $32 billion in remittances fail to reach recipients due to high transaction costs during cross-border transfers.
Numerous parties are involved throughout each stage of the global money transfer business. Each party acts as toll collectors, which contributes to the outrageous fees migrants are forced to pay when making cross-border transfers. In fact, some workers are forced to work an additional 12 hours to afford the fee.
To transfer money, migrants can choose bank-to-bank transfers or private remittance channels such as Western Union and Transferwise. However, these methods are both slow and expensive, causing an unnecessary challenge for migrant workers who have left their home countries to earn a decent wage.
Instant Remittance Payments from Japan to Thailand
RippleNet’s collaboration with SBI Remit and Siam Commerical Bank will allow Thai workers living in Japan to send money home using real-time remittance payments.
Through the process, Thai workers can open an SBI Remit account online and link it to an account associated with Siam Commerical Bank. Once they receive an SBI card, they can visit an ATM to make a deposit, which will be posted to their Thai bank account in real-time. Essentially, the Japanese yen deposited in Japan using SBI Remit will be available to withdraw as the Thai baht in Thailand.
Payment solutions like this will allow foreign workers to send more of their hard-earned money home, where it is needed, rather than losing it in exorbitant fees.
Cover Photo by Ryan Tang on Unsplash
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