How is Ripple reshaping payments?

Bullish investors have spent the better part of the past decade tightly gripped in a tumultuous love affair with Bitcoin. Yet the opportunities that have arisen as a result of distributed ledger technology extend further than the dramatic travails of a single cryptocurrency – and in many cases, dynamic alternative uses are proving to be far more sustainable.

US-based blockchain enterprise solution provider Ripple has already proven that.

Since 2012, Ripple has rapidly evolved into a one-stop shop for payment providers, financial institutions and merchants looking to leverage the power of distributed ledger technology to make faster, cheaper and safer transactions. Ripple operates software solutions including a real-time gross settlement system, remittance network and currency exchange – all of which are based on an open, neutral Interledger Protocol powered by validating servers and a consensus mechanism that’s incredibly similar to blockchain.

Yet unlike blockchain and Bitcoin, Ripple’s protocol uses a slightly more persistent data structure that instantly summarises payment information into a single value. Validating servers can then quickly cross-reference to offer an undisputed consensus on transactions.

In turn, the Ripple network has the ability to power larger transactions across the globe without as much fuss as some of its crypto cousins – and although RippleNet can be used to handle P2P transactions, its primary focus is enterprise. That’s why American Express, Santander, the Saudi Arabian Monetary Authority and RBC have all partnered with Ripple in recent years to implement its existing solutions or create bespoke apps to power new payment capabilities.

Ripple’s keystone solution is xCurrent, which is essentially a blockchain-powered messaging service designed to rival SWIFT and assist banks in settling cross-border payments using end-to-end tracking. xCurrent has been constructed to easily integrate behind a bank’s existing firewall and enables cross-currency flows by leveraging a bank’s existing relationships with other financial institutions.

In April, Santander even took xCurrent one step further by launching its One Pay FX app for iOS, bringing the bank-to-bank solution to the consumer market as a tool for customers to carry out feeless global transfers of up to £10,000 per day.

Meanwhile, Ripple’s blockchain payments solution xRapid relies on its crypto XRP token to give providers on-demand liquidity that can be based on any fiat currency to make cross-border payments while minimising FX risk. Using its more advanced protocols, XRP can settle in as little as 4 seconds – compared to an hour or more using Bitcoin. Ripple also claims it can scale to handle the same transactional output as Visa, although the network currently only oversees around 1,500 transactions per second.

Banks have yet to adopt Ripple’s XRP transactions, but MoneyGram, MercuryFX and IDT are all working to integrate the xRapid solution into their existing commercial offerings. According to Ripple, it’s already saving companies up to 70% on FX costs.

Yet it’s worth noting Ripple hasn’t moved into the market without controversy.

In 2015, the Accenture and Standard Chartered-backed company was fined $700,000 by the US Financial Crimes Enforcement Network for being too lax around anti-money laundering. Yet as part of that settlement, Ripple agreed to ramp up its security – and has subsequently continued to strike an impressive host of partnerships with investors, payment providers and other fintechs across 2018.


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