By the end of this year, the payment company SendFriend, supported by Mastercard and MIT Media Lab, will start using Ripple xRapid technology.
Thanks to the Ripple product, the Philippines-oriented SendFriend platform intends to provide labor migrants with a cheap way to send money home.
“That allows us on the back end to be more efficient with our capital. These are real-time settlements so we don’t have to do pre-funding, we don’t have to park money in the receiving corridor and then manage the foreign exchange risk. We can just do it one by one as the transactions go through.” – said the founder and head of SendFriend, David Lighton.
Investors from SendFriend include the MasterCard Foundation, Barclays, Techstars and Mahindra Finance, as well as Ripple itself. The SendFriend project is the winner of the MIT Media Lab Translational Innovation Alliance award and was developed at MIT by David Lighton. CEO David Lighton used to work at the World Bank, where he saw how hard it was to get money to countries in emergencies.
The SendFriend’s fees will vary from 2.5% to 3%.
Let’s make a comparison with some of the most popular money transfer companies:
- TransferWise charges $3 for transfers up to $300 to most countries. Fees for transferring amounts over $300 depending on the currency of the recipient. Typically you’ll be charged 1% for sending more than $5,000 USD to any country.
- Western Union, charges $5 for a money transfer of up to $50, but a transfer of $900 could cost $76.
- MoneyGram fee is $4.50 to transfer up to $50 and $9.50 to send up to $900.
Please note that these are the best prices you can get from these companies. For instance, most probably the MoneyGram $900 transfer to a different country will cost around $70.
Note, in May, the successful testing of the technology was held by the British company Currencies Direct. According to the project participants, Currencies Direct conducted direct transactions between pre-selected organizations, which took seconds in contrast to the 3-5 days that are currently required. This test served as technical evidence that Ripple (XRP) as a medium of exchange, compared to traditional payment methods, has a high rate and degree of transparency.
The main feature of xRapid is the use of the XRP token. The solution is focused on payment providers and financial institutions seeking to improve user experience and minimize costs in making cross-border payments, as well as increase the speed of the latter.
xRapid is going into commercial production. @mercury_fx_ltd, @Cuallix and Catalyst Corporate Federal Credit Union will be the first to make on-demand cross-border payments on RippleNet using #XRP. https://t.co/dQ02J4vdBl
— Ripple (@Ripple) October 1, 2018
In early October, three companies started commercial use of the xRapid payment platform. As Brad Garlinghouse of Ripple said, the three companies that started commercial use of xRapid were MercuryFX, Cuallix, and the Catalyst Corporate Federal Credit Union.