As the entire world gradually transits toward digitization of payments, a research has confirmed that the volume of Global payments is bigger than the world’s GDP as the remittance industry grows endlessly.
In a 2020 American Equity Research done by Credit Suisse, it was confirmed officially that one of the world’s leading financial payment companies, Western Union, is studying and deliberating on the use of Ripple (XRP) for cross border payment.The research confirms that many have been observing traditional payment means like SWIFT as being less than ideal due to transaction time and huge cost. However, the emergence of innovations like blockchain technology helps lessen some of the drawbacks in C2Bpayments.
The findings added that fast and cost-effective cross-border payment technology like Ripple makes traditional means face huge competition. Ripple platform offers solutions to some of the problems of the archaic payment means with its instantaneous transaction and low cost.
Companies like MoneyGram, Western Union among others are trying to create innovations to match some of the services provided that the new fintech companies. MoneyGram partnered with Ripple after the latter invested $50 million in the formers in a deal that will last two years.
Meanwhile, Western Union and some other companies like Transferwise managed to develop innovations and world treasury operations to offer real-time cross-border remittance at low fee, but it seems not enough to batter the new technology in town.
“While matching (netting) can “matchvolumes” across high-volume developed market currencies (G10), and use traditional banking rails for the remaining amounts, challenges remain in lower-volume EM currencies."
After collaborating with Ripple, MoneyGram witnessed a surge in its valuation and transaction volume. Via the deal, MoneyGram pledged that it would be using Ripple On-Demand liquidity product, which leverages XRP, to complete 10% of transactions between the Mexican and US payment corridor.
Ripple has over 300 financial institutions using RippleNet technology across the globe. MoneyGram, a strong competitor of Western Union, is one of them.Although testing of Ripple technology by Western Union has been quite less bullish, the research confirms that the latter is still evaluating the former.
Western Union has a strong presence and partnership in over 200 countries, numerous licenses, local market knowledge, compliance infrastructure and an enchanting brand name across the world, characteristics which the researches termed as difficult to replicate.However, while there are pieces of evidence that Western Union is still testing and observing Ripple (XRP) blockchain technology, Western Union may be wary of the security lawsuit faced by Ripple. The remittance service provider may also likely adopt XRP via RippleNet if it partners Ripple.
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