Western Union is reportedly considering making use of the Ripple protocol to help streamline the process of funds transfers and settlement.
If confirmed, it would symbolize one of the most significant shifts in the payments world to date. Western Union has been hitherto viewed by many as the antithesis of what cryptocurrency represents, basing its operation on what some consider to be a slight modification of legacy technology. Clients can pay upwards of 10% or more to transfer money around the world, and along with similar players like MoneyGram, the company is tightly integrated with the traditional banking and regulatory worlds.
Ripple first tweeted the following while promoting CEO Chris Larsen’s presence at Global Conference 2015:
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— Ripple (@Ripple) April 28, 2015
Later, a Ripple spokeswoman told CoinDesk that Western Union is “exploring a pilot project using Ripple”, without elaborating upon details. She did explain in general terms, however, that “financial institutions and networks use Ripple as a technology that powers real-time settlement in any currency to lower the cost of liquidity and compliance.”
Western Union has yet to corroborate the reports.
In the past, Western Union has dismissed the threat posed by digital currency, which is envisioned to allow quick transfers at practically no cost, to its business. It also expressed concerns about digital currency as part of comments on the New York Department of Financial Services’ (NYDFS) proposed BitLicense. But CEO Hikmet Ersek has also made slight indications that the company may be willing to work with Bitcoin should it become regulated and prove strategically advantageous to do so.
One should note, however, that the latest development does not imply consideration for Bitcoin or its use as a currency. Rather, the existing system of fiat would be supported using Ripple’s protocol, which has already been implemented by financial institutions and payment networks.