In perhaps a first of its kind, the blockchain run by Ripple will allow users to send and receive money overseas on SendFriend Project, similar to Western Union’s overseas transmissions. The product was the collaborative effort of techpreneur David Leighton and MIT Media Lab when the innovator won the institutions Translation Innovation Alliance Award.
The integration is of XRP Coin platform run by Ripple called XRapid, with that of a payment portal which has the blessing of payment card major MasterCard and was incubated by MIT.
SendFriend will create a new genre of blockchain-driven financial services under a category called ‘Consumer Payments Platform.’
xRapid and SendFriend
Ripple (XRP) uses xRapid to power all types of payment transactions in the cross-border category. The new system handles transfers in a matter of a few minutes.
As industries across the world experiment with cross-border payments using digital assets experimental products offered by the established decentralized project such as Ripple’s xRapid new defining transactional processes are being set up.
The functionality on xRapid is advanced as it essentially converts all transactions into liquid state transactions, using XRP. It also eliminates the need for Vostro and Nostro accounts.
xRapid has been tested in its beta-stage by big commercial organizations like Western Union, MoneyGram, Banco Santander, and Cambridge Global Payments, earlier in September.
Answering criticism of the loss of value in transactions due to high volatility which Ripple represents Cory Jonhson clarifies that the xRapid platform does not expose the user to the volatility for more than a few seconds and hence there is no actual loss incurred by using XRP platform.
Currently, SendFriend is in beta-stage and will available for full-fledged consumer usage by the end of the year. The first stage of the product going live will be in the Philippines where people can experiment with sending as well as receiving money from different parts of the world.
According to Leighton who pitched the idea to MIT Lab mentors at the competition and eventually went on to become the CEO of the firm says that in the current payment sector the focus has to be on the backend, which demands more efficiency than the actual capital itself. The key factor, Leighton says is handling these real-time settlements and do not involve or raise a need for pre-funding. At the same time, the product also eliminates the risk associated with foreign exchange and does not have to go through with a ‘parking’ it in receiving corridor. Every transaction is handled one by one until all of the transactions are completed.
Big financial players are backing SendFriend – from Barclays to Mahindra Finance to TechStars and MasterCard Foundation as well. The payment method which Ripple will offer will enable immigrants to remit their payment to family and friends back home in real-time, in the initial stages of testing the product that xRapid offers.