The news that Ripple (XRP) was working with Western Union Company (NYSE: WU) came suddenly and with great fanfare. Known for pushing the public perception envelope, Ripple’s product suite seemed perfectly suited to help upgrade Western Union’s legacy network. Yet, the CEO of Western Union recently came out to state that the prototype has not been as successful as they hoped.
Ripple’s status in the cryptocurrency world is well earned. Unlike many of their competitors, Ripple’s product suite not only works – it’s readily available for use. RippleNet offers multiple liquidity solutions for financial institutions, and many are actively integrating the software into their own business plans. Western Union’s negative response is shocking – after all, international transfers are the main goal of Ripple Labs development.
Western Union Pilot Program
Western Union announced earlier this year that they would be experimenting with Ripple’s xRapid service. The two seem perfectly suited to one another, and hopes were high among Ripple investors. As a well-established money transfer service, Western Union’s adoption would go a long way towards furthering public perception of cryptocurrency.
Yet, CEO Hikmet Ersek announced that the program had shown no increased efficiency over their current system. He clarified quickly that the scope of the prototype is miniscule – with only 10 transactions between USD and Mexican Pesos, it is highly doubtful that any statistically significant information has been gained. Ripple’s own staff quickly pointed out that such a small sample size produced near-irrelevant results.
“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,” details Asheesh Birla, Senior Vice President of Product at Ripple. “They do millions of transactions a month, and I’m not surprised that with 10 transactions it didn’t have earth-shattering results.”
The program is not yet over, and Ersek’s negative perception of xRapid did not extend to Ripple itself. He actively wishes to maintain the partnership, explicitly stating that he is excited about what Ripple Labs could produce.
Successful Ripple Projects
Meanwhile, Ripple continues to prove that they are the cryptocurrency of choice for traditional financial institutions. Global bank Santander recently released a mobile payment app that uses Ripple’s xCurrent system for its back end. The app allows users to transfer funds internationally using the liquidity of RippleNet to facilitate the transaction.
In the most direct comparison to Western Union, rival MoneyGram is also working with Ripple to revamp their aging transaction system. Western Union’s payment process is still involved, expensive and less automated than would be ideal. If MoneyGram International, Inc. (NASDAQ: MGI) can successfully integrated Ripple’s platform, they may be able to beat their competition to the punch and encroach on Western Union’s market share.
Article By: Adam Stone