Blockchain payments provider Ripple launched its “Line of Credit” service yesterday to cater to customers using On-Demand Liquidity (ODL) to source capital on-demand to initiate cross-border payments at scale using the digital asset XRP.
The service provides quick access to capital using a simple credit arrangement system, creating a financial service that ensures inclusion and helps accelerate business performance.
Today, we launched Line of Credit—a new beta service that allows #RippleNet customers using On-Demand Liquidity to instantly source capital and initiate payments using XRP. Read more on Insights: https://t.co/2DHVXa2yD1
— Ripple (@Ripple) October 8, 2020
Credit-lending and how Ripple helps
The lack of working capital can provide hurdles for many-a businesses, especially those involved in everyday retail or other real-world product providers. Small-and-medium business (SMB) producers face the brunt of this shortcoming and oft-see revenues pour in months after their capital is initially deployed (unlike trade or finance firms).
Such a scenario causes SMBs to turn towards credit facilities, which may or may not be legal and recognized. “Customers turn to create bespoke credit arrangements – with each partner, in each destination market. Each arrangement requires additional overhead and management, making it a slow, burdensome, and ultimately inefficient process,” explained Ripple in the regard.
Ripple’s Line of Credit solves this problem for its customers by providing upfront access to capital for every market through one simple credit arrangement – simplifying access to financial solutions that accelerate business performance and scale.
#RippleNet customers use one XRP-based arrangement w/ flexible repayment that works everywhere #ODL is available, regardless of sending destination or local currency, and costs less than traditional providers. 3/5
— Asheesh Birla (@ashgoblue) October 8, 2020
As per the blog, customers using ODL on RippleNet can purchase XRP from Ripple on credit—customers are charged one fee on the amount borrowed, with no hidden fees, and can receive approvals faster than through traditional means.
Ripple added:
“RippleNet customers simply take advantage of one simple XRP-based arrangement everywhere that ODL is available, regardless of sending destination or fiat currency and costs a lot less than most other available credit options.”
For now, however, the service is currently only available to eligible institutional RippleNet customers, and not by consumers, retail customers, or the general public.
Benefits of XRP credit lines
Ripple said its Line of Credit has already been piloted by RippleNet customers who specialize in cross-border money transfer. It added such companies grow their business and make global transfers more affordable, for more people.
Another benefit is that the newly freed capital can be used by firms to either reinvest in their existing business or even towards expansion plans, should there be any.
We’re providing customers with financial solutions that were once only available through legacy systems – now without the cost and overhead. This is the first of many more to come. #IoV onwards. 5/5
— Asheesh Birla (@ashgoblue) October 8, 2020
The Line of Credit operates wholly on Ripple’s own blockchain and XRP tokens. Meanwhile, Ripple said the service is the latest step in its “vision to enable the Internet of Value and break down the barriers in finance.”
“It’s an exclusive new service that financial institutions and money service providers can use to consistently provide customers with cost-effective, real-time cross-border payments,” the firm concluded.
The post New Ripple service enables XRP payments on credit for SMBs appeared first on CryptoSlate.
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