- New payments platform expands Ripple’s XRP-powered xRapid offerings
- Backed by MIT Media Lab, MasterCard, Barclays, Ripple and other major funders
- Initially targets the Philippines but remittance licenses in the US should follow
A consumer-facing international money transfer platform, SendFriend, which is backed by Mastercard, MIT Media Labs and Ripple is to integrate the latter’s XRP-powered xRapid to cut costs and boost the speed and efficiency of cross border money transfer services.
The development arises at a moment when innovative tech startups, particularly in the blockchain sector, are working frenetically to devise ways of slashing the transaction fees linked to conventional international money transfer services by building direct peer-to-peer payment networks that lower costs by cutting out the middle man. The aim is to allow people to send money abroad reliably, swiftly and without the off-puttingly high transaction fees the legacy players charge.
It looks virtually certain, however, that a standout in the fast-growing crowd of emerging blockchain-enabled money transfer online solutions is SendFriend. Scheduled to launch this year, even though there are only a few weeks left, it will initially target the Philippines to grant expats an efficient, inexpensive way to send money home. It also has a glittering accolade attached to it: it’s the winner of the prestigious MIT Media Lab Translational Innovation Alliance Award.
The project was developed at the world-famous Massachusetts Institute of Technology itself by SendFriend CEO David Lighton who wanted to build a platform that simplified cross border payments - and then proceeded to build it. SendFriend is the result of his endeavours. It harnesses the power of Ripple’s xRapid technology to smooth the process of making international money transfers, offering a seamless peer-to-peer experience for both senders and recipients. It accomplishes this via its native app that runs on Ripple’s blockchain distributed ledger technology.
Using the app, consumers can send money abroad (initially, to the Philippines) from anywhere with no need for the big legacy beasts in the cross border payments jungle, with their high transaction fees and slow transaction speeds. SendFriend has accomplished an impressive goal: it has slashed the fees charged by conventional international money transfer institutions by a huge 65%.
Conventional bank wires or money transfer services charge a minimum fee of 5% on each transaction. The minimum fee charged by services such as Western Union is 10% of the total amount sent. If a customer wanted to send $200 to a recipient in, say, the horn of Africa, that means he or she would actually have to send $220. With SendFriend the fee is far less: under 2%. It’s fast as well. Instead of recipients having to wait days, as they do with the legacy systems on offer, with SendFriend they get the cash within minutes of it being sent.
In addition to the financial backing it’s secured from the MasterCard Foundation, MIT Media Labs and Ripple, SendFriend has also attracted funding from Barclays, TechStars and Mahindra Finance – almost certainly because its management team comprises erstwhile executives from the World Bank and MoneyGram who wanted to solve the problems of slow transaction rates and high costs that their former companies couldn’t.
At this point, the app remains in its early adoption stage, although the company is seeking payments licenses in the United States, in which case a fast, inexpensive international money transfer service will become available to millions Stateside.
If you’ve enjoyed reading about Ripple, you might like our recent article here.
