The global remittance industry brings in a lot of capital. In the year 2016 alone, remitters have made payments of almost $600 billion to financially support their family members from their home countries or finalize business transactions.
Money transfer companies enable people from all over the world to make cross-border payments. But the actual model requires money transfer companies to use pre-founded accounts to provide liquidity for these payments. This makes the payment process to work slower and cost more, causing inconveniences for both customers and companies.
The implementation of XRP will enable MoneyGram to solve the liquidity problem most financial institutions confront with, while also making the system more efficient and cost-effective. Customers will also have the possibility to send funds real time in a transparent and certain environment.
XRP to Help Liquidity
MoneyGram will make use of XRP, the native cryptocurrency of XRP Ledger, and it will make its payments through xRapid, Ripple’s on-demand liquidity product.
xRapid works by enabling real-time foreign exchange settlements through XRP, enabling financial institutions to unlock liquidity and access several corridors with one pre-funded originating account.
In addition, financial institutions will have the possibility of sending on-demand payments, minimize foreign exchange costs and fees, and customers will be able to benefit from real-time updates regarding the status of their payments.
Alex Holmes, chief executive officer of MoneyGram, stated in a press release that:“Ripple is at the forefront of blockchain technology and we look forward to piloting xRapid,”and that “We’re hopeful it will increase efficiency and improve services to MoneyGram’s customers.”
Ripple Aims at Improving Cross-Border Payments
Ripple is striving to mend the glitches and issues of the cross- border payment process, regardless of the financial environment from which the payment originated.
Brad Garlinghouse, CEO of Ripple, said that:“The payments problem doesn’t just affect banks, it also affects companies like MoneyGram, which help people get money to the ones they care about”.
He added:“By using a digital asset like XRP that settles in three seconds or less, our clients can move money as quickly as information.”
Will MoneyGram really succeed in making cross- border payments faster and more convenient by using XRP? So far, the plan looks promising and the world’s remitters are waiting to reap it benefits.