Ripple, the parent company to XRP, has made an effort to crack open the billion-dollar remittance market in South America by opening an office in Brazil.
Billion-Dollar Remittance Industry
The company has been outspoken in the past about targeting developing countries as the primary beneficiaries of crypto remittance. In July 2018, a Ripple executive estimated that the company held 50 percent of the market share for crypto remittance in India,
“We looked early on at India, and we looked at two billion people – a huge market. And we decided, how do you get two billion people onto Ripple…we realized that if you get the top three banks in India onto Ripple, you get 80% of the market share. And then we looked at – where’s the future? And so we realized in the next five years, one billion people will become banked in India, but they’ll be banked through their phone.”
Now, the San Francisco-based startup is looking to Brazil and the $2 billion its population generates each year for the remittance marketplace. According to a press release issued June 12, veteran fintech executive Luiz Sacco will be heading the project as managing director.
Ripple Making Moves in Brazil
Ripple’s SVP of Global Operations Eric van Miltenburg said the office will address the high customer demand being generated in South America,
“In January, Ripple surpassed 200 customers on RippleNet. The company is experiencing rapid customer growth across all markets, and is launching in Brazil in response to high customer demand in South America. We are fortunate to have Luiz on board to expand our presence in the region and help our customers address the challenges of cross-border payments.”
The company has addressed the primary frustrations of current remittance in the region. According to Ripple, the average remittance payment takes three to five days for settlement and has a six percent failure rate. Couple that with the massive fees involved in sending payments globally, and Ripple is ripe to disrupt the marketplace through RippleNet.
Faster, Cheaper, More Secure Transactions
With RippleNet, customers using the service for remittance in Brazil will be able to settle payments in seconds and pay low fees for cross-border transactions. The company already reports having more than 200 banking clients for Ripplenet, including Santander Brazil and Banco Rendimento.
Through remittance, Ripple is attempting to establish an industry lead for both its technology and the application of XRP. While rumors swarmed last week that the company had purchased MoneyGram, Ripple is poised to compete and outperform existing remittance networks.
In particular, the company has the ability to enter developing nations and provide for unbanked populations who generally rely upon remittance as a source of money transfer. Likewise, XRP could be utilized by an entrepreneurial endeavor looking to develop more accessible tools–such as a smartphone application–for sending money around the globe.