Yesterday MoneyTap announced that Ripple had invested an undisclosed amount in the Japanese payment platform. MoneyTap offers a payment solution for consumers in some ways similar to Alipay or PayPal, but in the background it uses RippleNet to transfer money between the banks.
The investment represents the completion of a full circle (explained later), because Ripple initially indirectly had a part share of the solution, which is currently owned by SBI Holdings and 36 banks.
The app enables p2p payments, including using QR codes, although the wallet is linked to a bank account. One of Japan’s challenges is that bank payments generally are executed during narrow banking hours, whereas modern systems expect 24/7 operations. Hence Ripple’s technology is used as a solution to enable the banks to send transfer messages to each other.
By adopting MoneyTap, banks also save on the high interbank fees that exist in Japan. It plans to create an ecosystem around the platform. In fact, it was already revealed that there are plans to create new ATM software powered by MoneyTap. Customers view ATMs as commodities, so the idea is that the banking shareholders provide ATMs on a shared basis. It also helps customers moving around the country, as many of MoneyTap’s shareholders are regional banks.
The full circle
Two years ago, the first iteration of MoneyTap was launched by SBI Ripple Asia, a joint venture between SBI Holdings (60%) and Ripple (40%). Initially, it had just three banks signed up, compared to an original consortium of 60 banks.
However, in March 2019, it was announced that MoneyTap had incorporated as an independent venture and 100% subsidiary of SBI Holdings. Shortly afterward, 13 banks signed up as shareholders. Looks like it was a challenge to get banks to sign up to a purely SBI-owned app, hence the need to give banks a stake.
SBI Holdings also acquired OpenLegacy, an API firm that helps companies innovate on top of legacy systems. One of its purposes was to use use it for the MoneyTap app.
Apart from SBI, some of the bigger shareholders in MoneyTap are SMBC, Fukuoka and Daiwa Securities.
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