Ripple has released results of pilot runs of its xRapid service. The tests were conducted by sending money to Mexico from the US.
According to the press release, financial institutions using the service paid between 40 and 70 percent less than they usually pay traditional foreign exchange providers for the same service.
Reportedly, transactions with xRapid took minutes, while the average cross-border transfer using traditional means takes 2-3 days.
The part of the transfer that uses the XRP ledger lasts 2-3 seconds; the additional time is accounted for by “intermediary digital asset exchanges and local payment rails.”
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US to Mexico money transfer is a busy and competitive market. Until now payment providers have had to pre-fund bank accounts in Mexico or go through the banking system. There are trillions of dollars trapped in pre-funded accounts of this type worldwide, and the banks that are big enough to handle transfers on this scale are few, meaning that the market is not competitive.
xRapid works by sourcing the most competitive option from a selection of third parties, such as exchanges. A party is chosen, and the money is sent. That party converts the money to XRP and sends it abroad, where it is traded into the currency of the destination and transferred to the final account.
xRapid’s expansion is reliant on XRP being available in that place.
sheesh Birla, SVP of Product at Ripple, said: “It’s encouraging to see positive xRapid results because they validate what many in our industry already know: certain digital assets have utility. XRP’s utility lies in its speed and scalability, which makes it the perfect fit for cross-border payments. The XRP Ledger can send 1,500 transactions per second.”
Paul Dwyer, co-founder and CEO of Viamericas, said: “We were very pleased with our pilot results. It’s clear that xRapid can lower liquidity costs while increasing payment speed and transparency in a way that facilitates rigorous compliance controls. We believe that digital assets like XRP will play a key role in the future of cross-border payments, helping to safely address some of the structural inefficiencies of legacy settlement infrastructure as their adoption grows. We look forward to exploring next steps with Ripple.”