On the very first day of Swell Conference 2018, Ripple announced the commercial launch of its xRapid payments solution. In the official announcement, Ripple explains that “xRapid eliminates the need for a pre-funded nostro account when executing a cross-border payment. It sources liquidity from XRP on exchanges around the world. As a result, cross-border transactions occur in minutes and at a lower cost compared to traditional methods, which take days and incur high foreign exchange fees.”
Ripple’s xRapid payments solution basically challenges the existing SWIFT system used by banking institutions and calls it a completely outdated solution. Ripple claims that its xRapid payments solution improves transaction saving by 40-70 percent. Additionally, it also boosts transactions speeds by bringing down settlements time from average 2-3 days to just over two minutes.
Three Financial Institutions Pledge Their Support to xRapid
During the announcement of the commercial launch, Ripple also stated that three financial payments providers have pledged their support to xRapid. This includes MercuryFX, Cuallix and Catalyst Corporate Federal Credit Union. MercuryFX and Cuallix also participated during the pilot-phase testing of xRapid, earlier this year in May 2018.
MercuryFX will use the xRapid payments solution to power the key remittance corridor between the Europe and Mexico. Similarly, Cuallix will use it for the remittance corridor between the U.S. and Mexico. On the other hand, Catalyst Corporate Federal Credit Union will use xRapid to facilitate its cross-border payments service.
Alastair Constance, CEO and founder of MercuryFX talked about the reasons behind xRapid solution for their business model. He said:
“MercuryFX has been working closely with Ripple for more than a year to bring the power of RippleNet to our customers. In pilot tests we saw the benefits of xRapid, and we’re excited to roll commercial payments out within the quarter. The time to replace slow, expensive payments architecture is now because the need for global access to smooth-flowing capital has never been so acute.”
Brad Ganey, senior vice president and COO, Catalyst Corporate Federal Credit Union said:
“The traditional international wire experience fails to meet today’s expectations from a price, speed and ease-of-use perspective. Blockchain technology, and specifically Ripple’s xRapid product, resolves all three of these challenges simultaneously. Catalyst Corporate, through our subsidiary companies’ technology platforms, will leverage the XRP digital asset to transfer money across borders instantly on behalf of our 1400+ member credit unions. We have signed a production contract and are currently building out our plan.”
Ripple Executive Expresses Optimism on the Future on xRapid
The company sees the commercial launch of xRapid as a critical milestone in its future business expansion plans. while speaking to CNBC, Ripple’s senior vice president of product, Asheesh Birla said:
“I’m really excited to bring the product into the market at a time when there is a lot of skeptcism about digital assets and their real use case.” He further added: “Here’s something where we’re finding a ton of value and providing a ton of value to our customers using digital assets to move money more efficiently.”
In addition to the above mentioned three institutions, Ripple has been also testing xRapid solution with money transfer companies like Moneygram and Western Union. However, banks have yet not started onboarding the xRapid payment solutions. Birla says that big lenders are unlikely to be the first adopters.
“Banks worldwide are not first adopters of the xRapid product, but we are seeing a lot of financial institutions in general and payment providers moving forward with that product,” Birla said. He further added: “We have a lot of business with payment providers. In certain markets I think banks will move faster towards leveraging digital assets, and so it really depends on the regulation and the local market.”
Distinction Between Ripple and XRP
Ripple CEO Brad Garlinghouse has earlier made it clear that both Ripple and XRP are independent of each other. Ripple is a private company where XRP is a cryptocurrency powered by the XRP ledger.
In addition to the XRP-based xRapid solution, Ripple has also got other blockchain products within its RippleNet ecosystem, which facilitate instant cross-border payments at low cost. The company said that so far in 2018 they have achieved a dramatic expansion of its RippleNet network.
“This year we’ve seen massive customer growth quarter over quarter, signing an average of two production customers per week. RippleNet has also become a truly global network, powering faster, cheaper and more transparent cross-border payments to over 40 countries and six continents,” noted Ripple, in the announcement.