- Payments via Ripple not cheaper, according to WU tests
- Ripple CEO disagrees and Ripple Labs’ VP says WU favours traditional payment methods
- Viamericas and Mercury FX report cheaper transactions through xRapid
Western Union has claimed that low cost payments made via Ripple (XRP) and the financial benefits promised are unfounded. After testing Ripple’s xRapid for six months, Western Union arrived at the conclusion that payments via the technology are not cheaper.
The technology company Ripple Labs Inc. is known for developing finance technology that helps banks and other financial institutions decrease transaction costs. According to Ripple Labs, xRapid is designed to make international money transfers cheaper and faster.
After multiple transactions to test xRapid, Western Union’s CEO Hikmet Ersek said that Ripple’s product has not managed to provide savings for Western Union. Ersek added that Western Union tried the product because of criticism regarding their expensive transaction fees. xRapid, according to Ersek, was an opportunity for Western Union to make their international money transfers a lot cheaper. Unfortunately, the test results did not show any financial benefits for Western Union, Ersek said.
This type of review from one of the world’s most trusted money transfer brands poses a setback for Ripple Labs’ xRapid but Ripple’s CEO notes that Western Union did not do enough transactions with the product for the company to see a significant financial difference, adding that xRapid was only tested on the US dollar and Mexican pesos.international money transfers
Ripple Labs’ Vice President Asheesh Birla said that Western Union’s test only comprised of ten payments, a number far too low for Western Union to see a difference – especially considering the money transfer brand conducts millions of transactions per month.
In an interview, Birla told reporters that Western Union clearly likes traditional payment methods and encouraged that testing the product should be done on all of Western Union’s payments or at least a huge majority of said payments so that they can see results. Birla claims that doing this would reduce Western Union’s costs, noting that it can even result in a cost reduction of at least 50%.
Birla added that this claim is not speculation but a fact, noting that the company has proven this through its other pilots with Viamericas and Mercury FX. The two companies reportedly saw their costs slashed by xRapid during transactions. Cost reductions were between 40% and 70% proving that the product delivers what it promises when it is utilised correctly.
Ersek mentioned, however, that the xRapid programme will continue to be implemented by Western Union, adding that Ripple is run by “innovative and good people”.
