As the Consumer Protection Agency states, the new technologies offer ways to make cross-border payments both predictable in terms of charges and cheaper. All of the developments apply elements of a closed network payment system to cross-border money transfers sent by banks and credit unions.
Ripple’s technology for cross-border payments has attracted the interest of the United States Consumer Financial Protection Bureau (CFPB), an agency of the United States government responsible for consumer protection in the financial sector. In a publication with the title “Remittance Transfers under the Electronic Fund Transfer Act (Regulation E)”, the authority states that it has been monitoring the market for remittance transfers for quite some time.
The consumer protection agency points to three major trends in the market for remittances. First, there is the persistent growth and increasing functionality of the “global payments innovation product” (gpi) of the Society for Worldwide Interbank Financial Telecommunication (SWIFT). According to the CFPB, this will provide sending institutions with more advance information for cross-border credit transfers. At the same time, SWIFT aims to expand the capacity to support these payments.
Second, the CFPB has also observed the continued growth of fin-tech companies that are not banks and are expanding their reach through new partnerships and relationships with banks. In its third trend, the CFPB explicitly mentions the “continued growth and expanding partner payments messaging platform to support cross-border money transfers as well as a virtual currency, XRP, which can be used to effect settlement of those transfers”.
Author : Jake Simmons