Today, Ripple launched Line of Credit, a new beta service on RippleNet that allows customers using On-Demand Liquidity (ODL) to source capital on demand to initiate cross-border payments at scale using the digital asset XRP.
Limited access to working capital is one of the biggest barriers to growth for many companies. Unlike incumbents who have large balance sheets that allow them to scale their business quickly, many fintechs and small and medium-sized enterprises (SMEs) lack the capital and resources to compete. Faced with stalled growth, customers turn to creating bespoke credit arrangements – with each partner, in each destination market. Each arrangement requires additional overhead and management, making it a slow, burdensome and an ultimately inefficient process.
Ripple’s Line of Credit solves this problem for our 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.
Those 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. 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.
Line of Credit has already been piloted by RippleNet customers, who specialize in cross-border money transfers, are experiencing the benefits firsthand, helping these companies grow their business and make global transfers more affordable, for more people. It also opens up opportunities to use the capital freed from pre-funded accounts and further invest in their business to enter new markets and reach new customers.
RippleNet uses technology to deliver financial solutions vital for businesses that were once only offered by multinational banks—without the cost and overhead of legacy systems. By leveraging distributed ledger technology (DLT) and XRP, the universal asset for the exchange of value worldwide, Ripple can deliver access to services that were not previously possible.
Line of Credit is the latest step in Ripple’s 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.