In a pre-seed round, the United States-based global remittance platform, SendFriend was able to raise $1.7 million from thirteenth investors. Some of the companies that invested are Ripple, MIT Media Lab, Barclays, TechStars, MasterCard Foundation, Mahindra Finance, 8 Decimal Capital, and 2020 Ventures. Before now, New York Angels and Deloitte had already joined the round.
SendFriend And Ripple Labs
SendFriend was launched by a group of tech experts who previously had ties with Moneygram and the world bank. The platform intends to serve as a payment corridor between the United States and the Philippines. SendFriend is one of the benefactors of the Barclays Accelerator Program. The firm entered into a partnership with Ripple Labs because it has interests in using xRapid.
XRP (XRP) Price Today – XRP / USD
The xRapid protocol is a Ripple payment solution that uses XRP as liquidity during the transfer of value from one country to another. This system is cheaper and faster than traditional payment remittance. Ripple intends to make xRapid the standard option for global remittance. So far, xRapid is gaining popularity around the world. Big brands like MercuryFX, Euro Exim, Catalyst Corporate Credit Union, and Cuallix. Also, other big brands like MoneyGram, Western Union, IDT, and Viamercias have tested the xRapid solution. However, none of them have fully integrated it yet.
According to the CEO of SendFriend, David Lighton, Ripple’s xRapid is a good option because it improves the efficiency of their services. In his words:
“We enable real-time settlements so we do not need pre-funding. We do not need to put money in a corridor and start struggling with managing the risks attached to foreign exchange. Settlements can be done one by one.”
Ripple And SendFriend May Provide The Perfect Solution For The OFW Market
Recently, the World Bank published a report stating that the Philippines is the third largest remittance country in the world. Within the year 2018 alone, the country received $33 billion from its Overseas Filipino Workers. Migrates in the United States alone, send up to $650 billion to their home countries with payment service providers collecting $45 billion in commissions.
The World Bank also noted that there would be a significant increase in the cost of cross-border payment in the future. However, just a few countries have started taking the required steps to reduce these commissions or at least stop the future increase. In the UEA, a law was recently passed ordering all financial service providers to offer a 50% discount for remittance.
The founder of 8 Decimal Capital, Yuan Ruan, said that startups are looking for models that will reduce the cost for global remittance. In his words:
“SendFriend is a good option because it has a team of experienced people, a large remittance market and a group of investors that offer more than capital. The platform also has a growth strategy that doesn’t just focus on revenue from white-label solutions and APIs.”
SendFriend intends to reduce the cost of remittance by 65% compared to the traditional remittance industry. Long term, SendFriend may face competition from other payment platforms in the blockchain industry. Brands like BitPesa, GeoPay, BitSoko, and BitSure are already carving out shares of the African market. In Asia, platforms like Coins.PH, Bloom, Bitspark, Payphil, and Rebit are implementing improved remittance services that would serve as business models.
Do you think SendFriend will eventually spread its services across the Philippines? Share your thoughts below.