Ripple is getting some high-profile financial institutions involved in its xRapid product albeit indirectly.
Barclays bank and MasterCard became the latest financial giants to have something to do with x-Rapid, this through investments in an xRapid powered project, SendFriend. Both institutions were part of a funding round conducted by SendFriend, a next-generation remittance service. Other participants in the funding round were MIT Media Lab, Techstars, Mahindra Finance, 2020 Ventures, 8 Decimal Capital, and Ripple itself.
According to a press release published on Monday, the firm raised a total of $1.7 million which it said will be used to better enable Overseas Filipino Workers (OFWs) to securely transfer USD to PHP at the lowest rate available.
SendForth explained the difficulty in sending money to the Philippines through current conventional payment channels noting that it takes up to 5 days and high remittance fees to send money from the United States.
As Smartereum reported, Filipinos sending money home have resorted to using cryptocurrencies according to a report by blockchain startup Clovr. According to the report, cryptocurrency remittances from the United States to the Philippines was the fourth largest in 2018 bettered by only those to Mexico, China, and India.
Involving Ripple’s x-Rapid and XRP
To solve the remittance problem, SendForth explained that it will use Ripple’s XRP cryptocurrency as part of its integration of the xRapid.
The statement read:
“Through a partnership with blockchain company Ripple, SendFriend leverages xRapid to create a seamless money transfer experience. XRP is used as a liquidity vehicle for cross-border payments, enabling SendFriend to circumvent the corresponding banking system and convert USD to XRP to PHP in a matter of seconds.”
“SendFriend will launch as the only option for OFWs to securely and reliably send money internationally with fees that are 65% lower than the industry average as it replaces the frictions and fees of the banking system with one seamless, ultra-low cost experience to send money globally.”
SendForth is not the only project using xRapid to solve the remittance problem in the country. As reported, Vienna-based fintech firm Transpaygo announced last month that it will be using Ripple’s xRapid technology to offer cross-border payments in the Philippines and Mexico.
The xRapid Problem
While Ripple’s xRapid provides real-time transactions and instant liquidity, its adoption is pegged back by the volatile and unregulated nature of cryptocurrencies. As outgoing CEO of payment giants, SWIFT Gottfried Leibbrandt pointed out, financial institutions are wary of incorporating solutions that involve the conversion of funds to cryptocurrency.
Despite this, xRapid is getting some notable commitments. As reported, Euro Exim bank, through its Compliance and Operations Head Graham Bright, confirmed that the bank has integrated Ripple’s XRP-powered x-Rapid to its system. If not directly as with Euro Exim bank, organizations like Mastercard and Barclay’s bank have shown support for it by backing a service based majorly on the xRaapid. Ironically, SWIFT when it announced its partnership with blockchain consortium R3, to integrate its Corda network in its payment gateway was incorporating a service that also users Ripple’s XRP though to a lesser extent.