RIPPLE (XRP)–Ripple, the parent company behind the cryptocurrency XRP, made headlines in early January by kicking off a series of high profile adoption-related announcements. Brad Garlinghouse, CEO of Ripple, issued the announcement that his company would be partnering with three of the world’s largest money transfer services, creating a pilot program that would use XRP for direct liquidity.
In that time, MoneyGram and Western Union have come forth as two of the money transfer services to institute XRP-based transfers. While MoneyGram has been grabbing headlines for its evolving partnership with Walmart and the creation of Walmart2World in April, the CEO of Western Union has issued a somewhat mild critique of how the pilot program with XRP has panned out so far. Speaking in an interview with Fortune last month, Hikmet Ersek gave a brief opinion of his company’s current situation using XRP for cross-border payments,
“We are always criticized that Western Union is not cost-efficient, blah blah blah, but we did not see that part of the efficiency yet during our tests. The practical matter is it’s still too expensive.”
While Ersek’s comments drew a lot of ire from Ripple enthusiasts and investors, it’s worth framing the situation. To begin, Western Union’s partnership with XRP is only in its sixth month of development, and Ersek cautioned that the sample size could be too early and too small to draw conclusions from. Ripple issued a response to the statements made by Western Union’s CEO echoing a similar warning, stating that the company had barely scratched the service on XRP cross-border transactions. Asheesh Birla, Ripple’s senior vice president of product, told Fortune,
“If they were to move volume at scale, then maybe you would see something, but with 10 [transactions], it’s not surprising that they’re not seeing cost savings. They do millions of transactions a month, and I’m not surprised that with 10 transactions it didn’t have earth-shattering results.”
Western Union has thus far only used the XRP pilot program in USD-Mexican Peso transactions, further limiting the cost-savings measure of the currency.
The money wire company has again made the news in relation to cryptocurrency, with a recent patent application that utilizes cryptocurrency–but fails to mention Ripple or XRP. The technology outlined in the patent is for a system that manages transfer notifications and secure payments for a cryptocurrency based network. The patent is geared towards increasing the security of digital payments, a feature paramount to Western Union as the world’s leading money transfer service.
In addition to detailing a feature related to biometric authorizations (terminology similar to Walmart’s proposed blockchain patent for medical records), the patent goes on to list a number of different digital applications of money,
“Thus, in various embodiments, electronic transfer network may be configured to support and perform transfers of various currency types, including traditional and/or digital currencies, centralized and/or de-centralized currencies, cryptocurrencies, and any other medium of exchange (e.g., credit, gift cards or certificates, points in a user point system, etc.), between client devices and/or external systems in different areas, regions, or jurisdictions.”
While some will take this news from Western Union as a further indictment against XRP, it could be viewed as the opposite. To begin, it’s not surprising that Ripple is not mentioned in relation to the cryptocurrency service outlined in the patent–there would be no benefit in Western Union limiting its application to XRP alone when it could specify the broader industry of crypto. Western Union could have the full intention of operating their new system through Ripple’s currency, even if the patent does directly specify XRP.
If anything, Western Union’s patent is validation for Ripple and cryptocurrency. Despite Ersek’s earlier comments and the limited use of XRP in cross-border transactions, the company has clearly seen potential and value in the growing landscape of cryptocurrency.
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