For some time already, the financial services provider Western Union is experimenting now with the Blockchain technology. Six months ago, the collaboration between Western Union and the crypto-company Ripple began. The xRapid-technology should help the company to reduce its transaction costs. 13. June has drawn CEO Hikmet Ersek stock.
Ripple must be enthusiasts here: Hikmet Ersek, CEO of Western Union, so far, little impressed by the xRapid-platform crypto company. So he betrayed the 13. June, on the occasion of a meeting of the Economic Club of New York, the financial news portal Fortune.com:
“Again and again it is criticized that Western Union is not cost-efficient, blah, blah, blah, in our Tests, [xRapid] could find no improvement in this area.”
The XRP is for use in transactions only interesting if he’s proven to be the company would reduce costs, said Ersek further, in practice, transactions on the Ripple currency to be “still too expensive”.
Ersek acknowledged, however, that the pilot project was very small. A glance at the Figures confirms this. Thus, Western Union has processed in your Tests was only ten transactions on xRapid-platform. For comparison: in 2016, the provider of financial services reached a settlement rate of 31 transactions per second.
Western Union will initially adhere to the project
It is no wonder, when the ten-xRapid-transactions per six months have brought to the company no tangible Benefits. So Asheesh Birla, Director at Ripple product management sees this anyway:
“Not to make millions of transactions in a month, because it surprised me that they have not received any world-shattering results.”
A complete transition to the xRapid-technology could give Western Union a cost savings of 50 per cent, Birla more.
The Problem is that the classic money transfer to many (including personnel)causing costs:
“As long as you don’t remove these fixed costs from the Ecosystem, it will not be worthwhile for you to continue.”
Other pilot projects with xRapid should, however, be more successful. So Ripple announced last month a cost savings for the project partners, such as Viamericas, and Mercury FX from 40 to 70 percent.
Probably, therefore, the project will run for the time being. So Western Union CEO Ersek said, and his cooperation partners from Ripple to be “good people” and “very innovative”, which is why he wants the project “not to kill”. The Blockchain technology have the potential to be able to the cost of transactions via Western Union to lower.