TransferWise will only use blockchain tech if more banks start using Ripple
There’s no doubt that blockchain is trying to revolutionize the payments space, but it seems like there’s still a long way to go. TransferWise, a London-based start-up, recently said that it will only use the technology if more banks start using it. Taavet Hinrikus, co-founder and chairman of TransferWise, gave the example of Ripple – a company using blockchain technology to facilitate cheap and fast cross-border payments.
The technology has been hailed by many big companies such as IBM and Mastercard. But, TransferWise is not ready to use it yet. “We’ve heard this dream many times from different people. However if you start digging into it, you realize that it may look great on paper, but in reality, to make use of it, it’s really hard,” said Hinrikus on Fortune’s “Balancing the Ledger”.
The main issue is that the technology has not been widely adopted by banks yet. Moreover, since fintech companies are finding cheaper ways to transfer money, blockchain technology needs to prove itself as a worthy alternative. “We’ve looked at different blockchain technologies, but yet we haven’t found anything which enables us to do what we do in a way that is cheaper or faster,” Hinrikus mentioned.
TransferWise takes 15 seconds to move money from Australia to the UK and charges fees of 1% or less. It will take days and will possibly cost more for the same transaction at a bank, Hinrikus explained. He added that the company had looked at Ripple, but felt that it did not find a better proposition than what TransferWise currently offers.
“If every bank in the world was going through the Ripple network, it would be amazing. Yet how many banks are using Ripple today in production? It’s a very short list. In that sense we’re big supporters of Ripple or anything else…and if any of these gets enough adoption, and it actually materially helps us do things cheaper and faster, we’d love to, but so far we haven’t found one,” he stated.
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