TransferGo, an online remittance platform pitched at migrant workers, has entered into a new agreement with Ripple to use the company’s technology for cross-border transfers to and from Southeast Asia, Latin America and Africa.
Ripple announced the new deal in a blog post on Monday, stating London-based TransferGo will use RippleNet to facilitate cross-border payments, although it isn’t explicit that the remittance firm will initially leverage XRP for transactions. The post stated:
“[The CEO of TransferGo] acknowledges that by 2020, even a few minutes will be too slow, which is why TransferGo is looking to use RippleNet’s On-Demand Liquidity with XRP as an alternative to pre-funding.”
Like its larger competitor TransferWise, TransferGo uses an account-to-account “pre-funding” model to facilitate international transfers with funds being paid in and out using local bank accounts—but the payments company says this system has its limitations. According to the Ripple announcement, the fragmentation of technology amongst TransferGo’s banking partners has led to costs and scalability issues, with the firm having to undergo a “bespoke integration” with new financial institutions every time it opens a new remittance corridor.
RippleNet’s pitch is that it allows for a single, standardized point of access into a global collection of payment providers and financial institutions, and reduces payments costs by eliminating the need for pre-funded foreign accounts.
RippleNet gaining traction, can its success be reflected in XRP price?
The price of XRP, down 90+ percent from its all-time high in January 2018, seems to have remained remarkably indifferent to the recent flurry of RippleNet signups. TransferGo joins fellow remittance providers MoneyGram, SBI Remit, and InstaRem as a client of RippleNet, which according to Ripple has this month surpassed 300 customers and seen a 10x year-on-year growth in transactions.
The announcement seems to conclude a year-long courting stage between the two firms—TransferGo became affiliated with Ripple in 2018 when it launched a dedicated remittance corridor to India ostensibly based on one of Ripple’s technologies (to this date neither company has disclosed the logistical details of the India partnership).
Whatever the nature of the arrangement, TransferGo CEO Daumantas Dvilinskas claimed Ripple helped the firm gain a “competitive edge” in the Indian remittance market by speeding up settlement times:
“After launching our Ripple corridor to India, we were able to pay out remittances in minutes, Ripple gives us a competitive edge in India, which is the largest global cross-border remittance market, and today we’re moving more than a couple of million pounds per year.”
Now, TransferGo claims RippleNet can help the firm expand into new locations and scale towards offering “real-time” payments.
Posted In: XRP, U.K., Adoption