Ripple’s product xRapid, according to the latest reports will help in cutting down the costs significantly in the remittance market at the global level.
Ripple onto a great movement with its xRapid
The vision of Ripple is for value to be exchanged as quickly as information. The movement of information is quite instant though, a single payment from one country to another is slow, expensive and unreliable.
The official blog of the Ripple talks about its product xRapid and how it can offer instant payments. Opening their explanation with the internet of value, it states,
“A value transaction such as a foreign currency payment can happen instantly with the internet of value, just as how people have been sharing words, images, and videos online for decades.”
Further talking about it, the blog mentions
“The Internet of Value enables the exchange of any asset that is of value to someone, including stocks, votes, frequent flyer points, securities, intellectual property, music, scientific discoveries, and more.”
Ripple is trying to bring a transformational change in the world’s remittance market through their solution xRapid. If adopted on a global scale, xRapid could provide huge benefits in terms of cost and time.
Also, read: Ripple Benefits Not Yet Felt by Western Union
Making cross-border payments cheap and fast
Remittance payments are big business today. Total global payments are close to $600 billion actually. The fees associated with these payments total near $30 billion per year. Yet, the majority of them are small, according to the World Bank, averaging about $500 each.
The recent data suggests that the majority of remittance payments are sent from individuals working abroad to loved ones in the developing world.
As per the critical assessment of Ripple Pilots, financial institutions who use it save between 40 to 70 percent on traditional foreign exchange costs, the savings made by the financial institutions can ultimately be passed down to the customers, who send remittances payments.
With the use of this technology companies expects cost savings, along with a better payment experience, that will be passed directly to the user. This will create a situation of perfect competition in the market, whereby no single service provider will be able to manipulate the price.
As stated by Ripple,
“The $30 billion cost of global remittances, if reduced by a savings of 55% from xRapid, would lead to a global savings of $16.5 billion.” To realize what this could do for a family in a developing country, they looked at the cost of living in the top 5 remittance destination in the world: India, China, Philippines, Mexico, and Pakistan.”
As per their research, an estimated $16.5 billion in savings could provide 3.27 billion meals, 263.07 million monthly bills, and rent for 49.9 million people.
These benefits offer some ways in which lowering the cost of remittance payments could have major positive impacts on real people.
Currently, Ripple, world’s 3rd largest cryptocurrency has a market cap of $21,479,465,439 USD which is expected to rise even further as its products like xRapid goes mainstream.
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