Money transfer giant Western Union have announced that it is testing Ripple’s technology, including their XRP token, to make international transactions.
Rumours began to surface a month ago that there was a relationship between the two in place, but cryptocurrency markets have been bearish of late and traders chose not to get too invested in the news, emotionally or financially.
Western Union Chief Executive Officer Hikmet Ersek said that they were looking at blockchain solutions for “processing settlement and working capital optimization” and confirmed that, “we do test, we do have some tests with Ripple.”
Money transfer companies currently use pre-funded accounts, which results in excess capital tied up in multiple locations. The model also requires high fees, particularly problematic for the remittances market which makes up much of Western Union’s business.
The hope is that Ripple, or a similar technology, can transform this business and make transfers quicker and cheaper through a blockchain solution.
Ripple released a statement saying that they have been “testing different products with Western Union for a while” and claimed that they were “excited about our work towards a pilot implementation of xRapid, which uses XRP in payment flows“.
It has been a big week for Ripple, with partnership announcements rapidly mounting. In addition to the Western Union news there have been confirmations of pilot programs with the Saudi Arabian Monetary Authority and forex platform UAE Exchange, though these will not be using XRP.
XRP and Ripple
Ripple has faced criticism recently over what critics claim is an opacity around quite which relationships they have in place, and how XRP fits in with those relationships.
Simply put, XRP and Ripple are not synonymous, and owning XRP does not guarantee you a share in Ripple’s success. It is quite possible for Ripple the company to sign multiple clients and be highly profitable, without that success translating to XRP.
Though the good news has fed into the XRP price – it is currently just over $1 – it is trading $2 lower than at its peak last month.
