How Tempo and Cowrie are building on Stellar

Tempo and Cowrie get rid of the friction of a traditional remittance flow by building a new corridor on Stellar, empowering their customers to freely exchange money across borders.

About

Cowrie

Cowrie Integrated Systems is a financial technology company that provides value added services over electronic payment networks. Cowrie issues NGNT tokens, pegged to the Nigerian Naira, allowing users to trade and redeem these tokens in a global market.

Tempo

Tempo is an electronic payment institution and the principal EU anchor for Stellar blockchain payments. Tempo acts quickly to ensure pricing, foreign exchange rates, agent opportunities, and customer service remain highly competitive in regards to local markets.

Challenge

Traditional remittance flows can be slow and cumbersome, constricted by how legacy systems currently operate. Money Transfer Operators (MTOs) charge senders high fees to make up for increased operating costs and technical inefficiencies. Receivers end up losing value due to the many times their money passes through unfavorable exchange rates before it arrives at the end destination.Over the years, Tempo has seen customers struggle to make international payments as global regulations become stricter and financial systems fail to streamline operations. Tempo needed a solution that would remove the friction from the remittance flow while being easy, fast, and transparent for their customers to use.

International payments are also difficult to conduct if they involve less globally traded currencies, putting people who want to exchange those currencies in a tight spot. This is the problem Cowrie Exchange identified with their customers, who wanted to exchange Nigerian naira but had no cost-effective way to do so.

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Solution

Recognizing the possibilities of blockchain technology, Cowrie and Tempo decided to build their solution on the Stellar network. On Stellar, it is possible to issue digital tokens that are backed 1:1 by actual fiat currency. Cowrie set up the NGNT token, pegged directly to the Nigerian naira, and Tempo issued the EURT. Together, they built a bi-directional NGNT-EURT corridor so that customers were able to start redeeming and trading these tokens right away.

Speed

Cowrie knew their customers wanted international transactions to be as fast as Nigeria’s instant electronic banking system. Hours or even minutes were too slow to settle a payment.
It doesn’t matter if the payment is B2B, B2C, or C2C — with Stellar, a payment can be settled in a matter of seconds.

Ease

Due to Stellar’s interoperability, a bi-directional corridor has major advantages. Cowrie and Tempo both found that as much appetite as there was for the Euro in Nigeria, there was demand for the Nigerian naira in Europe too.
By setting up the corridor on the Stellar network, both companies were also able to take advantage of Stellar’s other features such as built-in KYC/KYB compliance and low transaction fees.
Establishing meaningful EURT liquidity and growing transactions both ways means that Cowrie and Tempo were also able to achieve favorable FOREX rates between the euro and naira.

Transparency

As much as Tempo values a great product, it also values providing a great customer experience. Customers can now track the status of their payments at any given point due to Stellar’s public ledger.
This offers a level of transparency customers are hard-pressed to find with traditional financial institutions and their intermediaries.

Gbubemi Agbeyegbe

Technical Director · Cowrie Integrated Systems

Results

10s

per transaction time to Nigeria

growth in daily payment volume over the last year

€500k

sent from Cowrie to Europe
per week

The cost-savings of building on Stellar apply not just to capital, but to time as well. Not only have Cowrie and Tempo been able to eliminate the need for pre-funding through this corridor, but payments on Stellar have averaged under 10 seconds per transaction compared to five business days with a MTO. By offering a cost-effective and rapid solution, the Cowrie and Tempo partnership empowers customers of all backgrounds – large enterprises, small-medium size businesses, and the individual – to easily send and receive money back and forth across borders.

What Stellar allows us to do is to eliminate all of the overhead of traditional remittance by doing everything digitally on blockchain. Tempo and Cowrie don’t need to tie up so much capital pre-funding accounts, and we get better exchange rates because transactions are matching against each other in both directions. So that's why we've seen this level of growth between Tempo and Cowrie.”

Gbubemi Agbeyegbe

Technical Director · Cowrie Integrated Systems

We offer an attractive solution for Nigerians in Europe to send money to Nigeria because we are able to provide one of the best FOREX rates for Nigerian customers. By establishing a very good rate for Nigerian currency and individual customer base, we were able to provide corporate entities very competitive rates and increase flow to Nigeria. We found that this to be a very good idea, and we are now going to launch this solution in other countries together with Stellar.”