Ripple, the company that builds blockchain solutions to enable instant payments across the world, has made a deal with Moneygram, the leading international payment transfer’s company.
The move is significant because the arrangement involves the use of XRP, Ripple’s digital currency, which has recently soared in value but also faced questions about its practical uses.
Investors and traders have reacted positively that the price went up by 20% and many analysts believe the price of XRP token will reach back to $3, which was the price before the coinmarketcap blunder.
— Brad Garlinghouse (@bgarlinghouse) January 11, 2018
International Payments is a multi-billion dollar industry and the current way of using a centralized authority who hold enough foreign reserves to be able to facilitate the cross-border transfers is very inefficient considering the time and cost involved. Depending on what transfer service and the type of transfer you choose, a typical payment to say Japan, would take anywhere from 3 hours to 5 days. The current transaction time for XRP transfers is only 4 seconds. This is a very big selling point for Ripple, which has successfully courted some banks and payment companies for initial pilots.
The Ripple official twitter handle has tweeted the news that there will be more payment companies like Moneygram joining the usage of XRP in 2018.
— MoneyGram (@MoneyGram) January 11, 2018
There is a very important incentive for payment companies to join the blockchain based instant transfers, staying relevant and keeping the business. Consumers don’t have any reason to be loyal to one payment transfer company and so, if a competitor uses advanced technology promising a 4-second transfer, customers would flock and the payment companies will lose the business. The members of the Ripple’s consortium includes many big banks and payment companies like American Express, UBS and Santander.
What do you think about XRP, do let us know in the comments.