- Strategic takeover in the works
- Partnership with Western Union on the horizon
- News comes hot on the heels of partnership with MoneyGram
Danny Aranda, the Managing Director of rising international payments star Ripple, has announced that its digital currency, XRP, is planning a cross-border takeover that will make global money transfers much faster – and help it stand out from its cryptocurrency rivals.
Speaking to the British news outlet Express.co.uk, Aranda said that Ripple was intent on producing highly viable solutions in the digital landscape.
Describing much of the cryptocurrency space as focusing on experimental projects and small proof of concepts, he said: “But Ripple is really determined to make sure that we are focused on serving real customers with real problems and our focus area is around cross-border payments and ensuring that we deploy cryptocurrencies as a better method to fund the liquidity for the cross-border flows which is a huge cost centre and a huge problem to that.”
Explaining that Ripple’s mission is to improve the financial infrastructure by making cross-border payments simpler across the world, he noted that currently someone living in Europe who wanted to send money to a family member in the US would have to wait two to four days for the transaction to be finalised. It would, he pointed out, be faster to fly over to her and give her the money in cash or FedEx it over. The length of time required by electronic wire, he said, was “incredibly crazy” in the context of the infrastructure that exists today.
Conceding that the cryptocurrency market was still relatively small, Aranda acknowledged that small movements can result in large price shifts in digital currencies like Ripple’s XRP and Bitcoin. The $20bn traded in and out of cryptocurrencies in total, he observed, was dwarfed by the $5tn a day traded in FX markets for euros and dollars.
The volatility was the main issue, Aranda said, and it was intimately tied to the smaller scale and volumes moving in and out of digital currencies.
Hence Ripple’s ambitious global expansion plans. As volumes increase and scaling up gathers momentum, the volatility will dampen. While there is no official confirmation or anything amounting to an inked deal yet, Ripple is already poised to partner with international money transfers colossus Western Union. WU, Aranda said, would be a most welcome partner for Ripple; it would be able to use its digital infrastructure to push much larger volumes of money through the platform.
Ripple sees enormous potential in the money service business. In other words, in providing innovative solutions to customers wishing to send money abroad rapidly and securely. International payments firms like Western Union are competing very vigorously with banks and other conventional financial services providers, Aranda observed, and to gain their customers, they’re offering new ways of making cross-border payments, including via platforms such as Ripple.
Should this partnership come to fruition, it would be a real coup for Ripple, firing a warning shot at conventional competitors. And since it’s also working with another international payments leviathan, MoneyGram (with a view to penetrating the lucrative Mexico market), rapid expansion is hardly a fanciful daydream.
The days of XRP’s volatility could be coming to an end in the foreseeable future.
