Will Western Union start using Ripple’s XRP?

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  • Ripple wants money transfers giant to implement xRapid system
  • Western Union confirms it has commenced “piloting” stage

Cryptocurrency and international money transfers platform Ripple has achieved several business coups of late, with Saudi Arabia’s central bank and LianLian International using its systems for live transactions. Yet the biggest name to date to join hands with the fintech startup, Western Union, is staying cautiously in the testing phase. Will it jump into live use mode any time soon? The answer, it seems, may lie with Ripple itself.

The issue that complicates matters is the fact that Ripple runs two very different systems:

  • Current – this is a messaging and data system that banks use to confirm payment details with one another using the RippleNet blockchain, settling actual expenses later.
  • xRapid – this is a little more complicated.

xCurrent doesn’t involve using Ripple’s XRP cryptocurrency, xRapid does. Whereas xCurrent simply transfers information, xRapid transfers actual liquidity across borders. Therein lies the problem for Western Union: actual cross-border payments using XRP bring with them a veritable can of regulatory worms and they necessitate finding ways to account for the currency’s notorious volatility. They also involve figuring out reliable methods of converting Ripple’s XRP cryptotechnology to fiat currency. In other words, xRapid is a good deal trickier to operate than xCurrent.

xRapid is also the type of system that international payments veterans like Western Union may need. Firms specialising in cross-border payments don’t simply cater exclusively to banks, but also to individuals wanting to make peer-to-peer transactions. xCurrent won’t allow you to send funds abroad to the other side of the globe for it to be received without a bank – xRapid will.

Because there doesn’t appear to be any discernible connection between xCurrent usage and the value of XRP, a fair number of Ripple speculators eagerly want to see xRapid being tested.

At this stage, it’s not possible to gauge when, or even whether, Western Union will adopt xRapid. But there a few indications to suggest that such an outcome is progressing.

Western Union’s Director of Operations in Australia Simon Millard recently confirmed that the money transfers giant was “piloting some settlement tests with Ripple for certain corridors”. But the company’s CEO Hikmet Ersek recently indicated in an interview with Bloomberg that Western Union may be placing the quest to find solutions for xRapid at the forefront of its blockchain tests.

Ersek said: “We are looking especially in the processing settlement and working capital optimisation.”

These are precisely the issues that have to be solved and settled before Western Union can begin using xRapid to make actual money transfers. If solutions are indeed found, they’ll be of enormous benefit to xRapid.

Ripple has been clear about its aims. It wants to get Western Union to use the xRapid system, as reflected in the following company statement: “We’re excited about our work with Western Union towards a pilot implementation of xRapid, which uses XRP in payment flows.”

Should Western Union take the system up, it’s likely to be confined to specified payment corridors at first. But given the regulatory complexities and the need for the uptake of alternative blockchain systems before xRapid becomes viable internationally, Ripple’s lobbyists, lawyers and engineers may need to accelerate their efforts to get xRapid up and running before Western Union decides the time for testing is over and the time for implementation has begun.


Nigel Frith
Nigel Frith
Former Global General Manager
Nigel was the Global General Manager at FXcompared. Nigel has a background in marketing for businesses and consumers as well working in a variety of online financial services roles. Read more

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