On Friday (9 November 2018), MFUG Bank, the important banking unit of Mitsubishi UFJ Financial Group (MUFG), the world’s fifth largest bank (by aggregate assets), reported the signing of a Memorandum of Understanding (MOU) with Banco Bradesco, one of the largest banks in Brazil, to team up on the advancement of another cross-border payment service, using RippleNet, among Japan and Brazil.
MUFG Bank is Japan’s largest bank. Its parent, MUFG, is headquartered in Tokyo, has more than 360 years of history, and is one of the fundamental companies of the Mitsubishi Group. As for Banco Bradesco, it was established in 1943, and it is headquartered in the city of Osasco, in the metropolitan territory of São Paulo.
Californian FinTech startup Ripple is one of the world’s driving specialists in the region of cross-border payments solutions. RippleNet, its worldwide payment network, connects banks and payment providers with the end goal to give “one frictionless experience for global transactions.”
Financial institutions joining RippleNet “can process their customers’ payments anyplace on the planet instantly, dependable and cost-viably.” As cross-border payments solutions supplier Ripple clarified in a blog entry on 21 September 2018, membership of the RippleNet network offers the accompanying benefits:
“Today, banks and providers conquer a divided worldwide payments system by building different, custom transaction relationships with individual networks. By joining RippleNet’s single overall network of institutions, organizations gain a single purpose of access to a standardized, decentralized infrastructure for consistency across every single worldwide association.”
“Heritage international payments can’t give lucidity around transaction timing or costs, and numerous transactions eventually end in disappointment. RippleNet’s nuclear pass-fall flat processing ensures more prominent assurance in the conveyance, and its bi-directional messaging ability provides uncommon end-to-end transaction visibility for fees, conveyance time and status.”
“Disparate networks and rules make grinding and bottlenecks that slow down a transaction. RippleNet’s pathfinding capabilities slice through the messiness by recognizing ideal routes for transactions that at that point settle instantly. With RippleNet, banks and providers can lessen transaction times from days to simple seconds.”
“Existing payment networks have high processing and liquidity provisioning costs that result in fees as high as $25 or $35 per transaction. RippleNet’s standardized rules and vast network significantly bring down processing costs. RippleNet also lowers liquidity provisioning costs or can dispose of the requirement for expensive Nostro accounts inside and out through the use of its advanced asset XRP for on-request liquidity. The final product is a drastically lower cost of transactions for providers and their customers.”
MUFG says that despite the fact that “the relationship between MUFG Bank and Bradesco dates back to 1973 when an MUFG Bank predecessor bank invested in the Brazilian financial institution,” the MOU is “an extension of an existing September 2017 joint effort assertion between MUFG Bank and Bradesco, and represents the banks’ most late business commitment.”