After years of dependable service and facilitation of international money transfer, Western Union has grounded itself as one of the top tier institutions when it comes to financial services worldwide. But to keep this reputation and the trust of your customers you need to be innovative enough at ever point in time to be able to meet their needs, adopting the latest tech to help you adapt to this fast growing tech savvy world we live in now. This is why the company is partnering with Ripple to “test-drive” the latter’s services compatibility with their global money transfer business.
On Tuesday, CEO of Western Union – Hikmet Ersek , told financial sector analysts during an earnings call, that they were going experiment with Ripple in capital optimisation and settling of transactions, as well as testing the XRP, Ripple’s cryptocurrency.
Innovation And Adoption Of New Tech To Meet Market Demands
This announcement only comes just about a month after fellow global money transfer company, Moneygram, also announced its partnership with Ripple to use the company’s blockchain platform to better its services. It appears that the compatibility of Ripple with the business activities of most banks and financial institutions is actually a reality and not popularity stunt.
The decision to adopt the XRP too is a big plus to the crypto and Ripple as it on the surface debunks the critics’ claim of being “superfluous to the money transfer process and banks don’t actually need it.”
Integration Of XRP And Ripple Into Banking Systems
Ripple’s blockchain software, XCurrent, is being tested by many banks for record keeping of their transfers, however, not many of them use XRapid – the Ripple product that enables the integration of XRP.
Ripple calls its XRP a “strategic weapon”, and it believes that its adoption by banks will be a key catalyst for its growth. The XRP’s present market cap sits at $42 billion, after suffering a drastic fall as the cryptocurrency fell from the $4 per coin price in January to $1.07 as at Wednesday.
Here is Hikmet’s answer from a question he answered during an interview after the announcement. He was asked of he saw Ripple and XRP as “a technology looking for a business or do you see real use cases here?”
“I would say and we are looking especially in the processing settlement, and working capital optimization…also in the regulations part, on the compliance part of the blockchain capabilities … we do have some tests with Ripple and we did that in some corridors also and the Ripple is one example.[…]
Well first, we have to differentiate between cryptocurrency and blockchain obviously. And then blockchain is definitely something interesting as an application, and which we may use in several parts as I mentioned earlier, is it a regulatory technology or digitally identifying or is it the settlement. And we, with people do with ripple some tests with some corridors on the settlement side. Is it dollar to pesos on that side, can we use that on a real time blockchain environment”
Hikmet’s reference to working capital optimisation has finds its significance in the claim of Ripple CEO, Brad Garlinghouse stating that the XRP will help bank avoid “nostro” and “vostro” accounts. He said at the Goldman Sachs tech forum that Ripple and XRP was a cheaper and faster means of transferring money, even than the current SWIFT system.
One of Ripple’s correspondents stated that Wetsern Union was going to adopt the XRapid service and XRP as well, however, no one from Western Union has made any comments with regards to this in particular.
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