A procedure to recover funds by reconverting XRP into fiat when a remittance fails in On-Demand Liquidity (ODL) payments under Ripple’s cross-border payments service, Ripple Payments, has drawn renewed attention.

The Crypto Basic, a blockchain media outlet, reported on Oct. 7 that Ripple’s official documents spell out how to handle cases where a sender’s fiat is converted into XRP and a problem occurs at the final recipient stage.

The key is to prevent funds from remaining in XRP after a failed payment. If a problem occurs, the system retries the payment according to set procedures. If processing is still not completed, it reconverts the XRP into fiat and transfers it to a segregated sender account (SSA) set up at the receiving institution.

The retry method and duration differ depending on where the error occurs. For example, if XRP has left the originating exchange but the recipient side cannot confirm the deposit, ODL can retry at 30-minute intervals for up to 12 hours. Separate retry periods apply to other failure stages.

The SSA that receives recovered funds is a dedicated account for the sender’s funds. The document said that when funds reconverted after a payment failure are deposited, the SSA functions for the sender like a "nostro account". A nostro account is an account a bank opens in its own name at another bank to hold foreign currency and use it for payments. Through the SSA, the sender can access the recovered fiat funds again and use them for subsequent payments.

The SSA balance is also used for subsequent payments. When the sender requests a new quote, ODL first checks the balance in that account. If there is enough, it processes the payment with those funds without going through the entire ODL transaction process again. Only if the balance is insufficient does it source the remaining amount through the usual liquidity route.

In normal payments, XRP is used as a bridge asset linking value between currencies, and in failed payments, recovered fiat becomes the funding source for subsequent transactions. Ripple also offers options for handling foreign exchange on SSA funds, including sender conversion, recipient conversion and no conversion.

ODL volumes are also growing. A DAS Research report said ODL processed $1.3 billion in payments in the second quarter of 2025, up 41% from a year earlier. It said more than 300 financial institutions, including SBI Holdings, Santander and Tranglo, use the system. It presented Santander’s ODL-based cross-border payment volume in the third quarter of 2025 as having risen 40%.

The document highlighted this time shows that ODL has procedures not only for processing payments but also for recovering and reusing funds after failures. In particular, prioritising recovered funds for subsequent payments is significant in that it prevents senders from having to repeat the full liquidity-provision process each time.