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Ripple’s XRP is not suitable for Mexican remittances, but it might be a good solution in the African market where Intermex has recently expanded.
In February, we reported about Ripple‘s collaboration with Intermex (International Money Express, Inc), provider of remittance services to Latin America and the Caribbean corridor. Within the partnership, Intermex was to use Ripple’s On-Demand Liquidity (ODL) through RippleNet and “enable faster cross-border payments between the U.S. and Mexico.” However, Intermex has recently declared it will not use XRP technology for its Mexican remittances.
Intermex is the world’s leading remittance provider from the USA to Mexico. Every year, it processes over 30 million payment transactions via a network of 100,000 payer locations. Notably, Mexico is the third country with the highest number of remittance recipients. For example, in 2019, its remittance flows totaled $36 billion.
Intermex was expected to leverage RippleNet for faster, transparent cross-border remittance services between the U.S. and Mexico. But as Intermex CFO Tony Lauro explained, Ripple is not suitable for its major markets. He said:
“We’re looking at Ripple for a couple of other products which I think we mentioned in the press release. The first of which is RippleNet which, as you know, is their hub connecting financial institutions together which will enable us to onboard new players faster than we would if we were doing direct connections to each one.”
Intermex CEO Robert Lisv continued:
“Ripple will not be an answer for places like Mexico. We’re very proud about the relationships we have there . . . we have very tight relationships that strategically setting plans and objectives with those players. And so, you won’t really see us leveraging Ripple in our core markets. I think it will bring us more growth in newer markets in places where we’re exploring going into ancillary products.”
Ripple’s XRP is not suitable for Mexican remittances. But it might be a good solution in the African market where Intermex has recently expanded.
Ripple Expanding Remittance Corridors
Ripple aims to foster the involvement of cryptos in remittance services. Therefore, it is expanding its partnerships with financial institutions to provide global payment solutions across the remittance corridor. Its RippleNet’s On-Demand Liquidity service relies on XRP as a real-time bridge between the transfer of currencies to make cross-border transactions faster and cheaper.
Indeed, Mexica is not the only country where remittance services are popular. Recently, Ripple entered the second phase of its partnership with DeeMoney, the leading money exchange and transfer service in Thailand. The new partnership allowed Thais to remit funds to their homeland at cheaper rates.
Besides, Ripple expanded its partnership with the South Korean crypto exchange Coinone that is penetrating the Korean remittance market via Ripple’s services.
Another Ripple’s important remittance partner is MoneyGram. Since the beginning of their partnership, MoneyGram has received $11.3 million worth of XRP, $8.9 million in the fourth quarter only. As the company stated, it immediately liquidates all XRP received. In addition, MoneyGram is using XRP to move 10% of its transaction volume between the U.S. and Mexico.