The remittance industry which also regarded as the Digital Remittance Industry is growing unexpectedly, recording about $1.93 billion market value in 2018 with expectation that it will grow up to $8.61 billion by 2025.
While a number of top firms see the industry as being very lucrative, plunging in, the month of June was quite busy for the sector as update like Ripple – MoneyGram partnership, Facebook’s Libra among others surfaced.
No doubt, the 21st century technology, blockchain, is revitalizing the sector to a better one than ever thought, making users experience healthier service that is surely life changing.
During an interview session with PYMNTS, the SVP of business and corporate development at Ripple, Kahina Van Dyke, shared her perspective about the new payments system while discussing the partnership between Ripple and MoneyGram.
The vice president said cross-border B2B payment system has been known for its sluggish and tiresome service for over 20 years, but people had no choice since money eventually gets to their destinations.
“We just kind of dealt with a system that we knew was inefficient but frustrating,” she remarked.
Solutions offered by blockchain technology and digital assets like Ripple XRP in transporting data has made cross border payment instantaneous, taking a quantum jump.
Van Dyke said the existing system makes remittance a rocket science for small organizations and individuals, adding that the traditional banking system is not suitable for smaller transactions or firms that don’t have numerous bank accounts around the world.
“Today’s systems are more geared toward giants like Coca Cola, with a global network of suppliers”, Van Dyke revealed, adding that it is quite expensive or impossible for small merchants or micro companies.
Van Dyke illustrated that blockchain technology (Ripple XRP) offers not just a fast but cost efficient fund settlement corridor.
“We know the future is coming, and it’s a transitionary period from the old inefficient infrastructure,” she explained to PYMNTS that the only challenge is to have the broad change.
Van Dyke told the news platform that usually, remittance firms like MoneyGram need to pre-fund accounts in other countries and pay its agents before executing a successful cross border transaction. This takes several day and tie up capital.
Contrarily, Van Dyke inferred that alliance between Ripple and MoneyGram, will allow the latter make use of xRapid which leverages XRP for transaction, and this make fund settlement cheap and swift by converting currencies to XRP and then exchanged into pesos at the recipient’s end of the transaction.