Ripple [XRP] – Western Union partnership encountering a rift?
Ripple [XRP] teamed up with the internationally recognised financial institution, Western Union six months back in February, 2018. However, this experiment undertaken by Western Union has not yet experienced a significant profit. Ripple [XRP] boasts about its advanced blockchain technology which makes international money transfer, faster and more affordable than others. BCFocus has previously reported about the unification of Ripple [XRP] and Western Union.
The CEO of Western Union, Hikmet Ersek opined that the company is in a phase of testing xRapid, the product of Ripple [XRP]. XRP is used in the form of a conduit for transferring money across foreign nations and currencies. However, this partnership failed to save money till now. Western Union CEO in an interview with Fortune on Wednesday commented, “We are always criticized that Western Union is not cost-efficient, blah blah blah, but we did not see that part of the efficiency yet during our tests.”
He explicitly mentioned, “The practical matter is it’s still too expensive.” His opinion on accepting Ripple [XRP] crypto coin as payment mode hinges only on the proven result of reducing the costs of the company. Such a statement from the Western Union CEO is, indeed, a hard blow on the reputation of Ripple [XRP]. The impact is significant since this particular cryptocurrency XRP is currently holding the third position in terms of market valuation. The present market value of Ripple [XRP] coin exceeds $20 billion.
Nevertheless, the Western Union CEO pacified the situation stating that it’s too soon and “too small” to decide anything. Western Union has undertaken limited experiment on Ripple [XRP] for transferring currencies. The two currencies undergoing transfer using this digital currency are Mexican pesos and U.S. dollars.
In totality, only 10 payment transactions involving xRapid have been made so far by Western Union. Asheesh Birla, the senior Vice-President of Ripple’s [XRP] product commented, “If they were to move volume at scale, then maybe you would see something, but with 10, it’s not surprising that they’re not seeing cost savings.”
Birla further stated, “They do millions of transactions a month, and I’m not surprised that with 10 transactions it didn’t have earth-shattering results.” He also mentioned that the costs involved in foreign exchange have “been on average better than what they normally see.”
According to Birla, the issue Western Union is presently encountering is that it is “straddling” the legacy costs. This occurs due to money transfer conducted in traditional manner. Ersek is, however, still hopeful that blockchain technology have the possibility to reduce Western Union costs. He reassured about the commitment that Western Union has towards Ripple [XRP] program.
On the partnership issue, Ersek commented, “I don’t want to kill it.” He further added that during collaboration, Western Union noted the Ripple team has “good people’’ with “very innovative” approach. For few crypto enthusiasts, who observed Western Union’s transferring of payment tests, found Ripple [XRP] to be a boon as digital asset.
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