With the announcement, Fidor has become the first bank to integrate Ripple’s payment protocol, allowing its customers to instantly send money in any currency in any amount through the bank’s money transfer products at a lower cost.
The move is significant as it will allow Ripple to showcase how its unique open-source approach to payments can be used by banks to replace many of the common intermediaries in the industry, thereby passing on savings to partner institutions, and by extension, their clientele.
Matthias Kröner, CEO of Fidor Bank, elaborated on the benefits of the new partnership, stating:
“Ripple enables us to securely and instantly send money anywhere in the world at no additional cost and through the same customer facing products and relationships we offer today.”
The news follows Ripple’s most recent high-profile addition to its team, when it revealed in April that Stanford professor of economics Susan Athey would join its board of directors after previously serving as an advisor.
With the move, Fidor customers will continue to engage with Fidor and its products in a similar manner, as they are not required to hold separate Ripple accounts. Fidor offers its Fidor Smart current account, a product that incorporates traditional bank account functionality with Internet payments and banking services.
On the business side, Fidor will also harness Ripple’s protocol for intra-bank payments between its German banks and partners in other countries to lower the costs associated with settlement and foreign exchange risk. It says the move will have the long-term benefit of allowing it to more seamlessly interact with other banks utilizing Ripple’s network.
The German bank has been lauded for its focus on e-commerce and the mobile Internet, and has openly spoken about its efforts to distance its offerings from traditional banks.
Boost for Ripple
The move can also be seen as a boon for Ripple, which has taken a different approach to bringing the benefits of bitcoin-like technology to payment and remittance networks and exchanges, building a community of developers, investors and financial companies that are focusing on creating a currency-agnostic payment mechanism rather than an alternative currency.
Speaking about the announcement, Ripple Labs’ CEO Chris Larsen also suggested the move is a validation of his company’s approach to open-source payments:
“As an innovator and leader in the banking industry, Fidor is using Ripple to define a new standard for what a bank can be and how it can serve its customers.”
To learn more about Ripple labs, its architecture and its role in digital currency ecosystem, read our most recent report on the company here.
Image via Ripple