SendFriend is the latest company to integrate xRapid software into its platform. The payment company, which is backed by Mastercard, TechStars, Barclays, Ripple and MIT Media Lab, will use the xRapid product to save costs as well as improve transaction speeds.
“That allows us on the back end to be more efficient with our capital. These are real-time settlements so we don’t have to do pre-funding, we don’t have to park money in the receiving corridor and then manage the foreign exchange risk. We can just do it one by one as the transactions go through,” said CEO and founder of SendFriend David Layton.
Layton said that Ripple’s xRapid provides a high level of efficiency and offers companies and people the opportunity to work more effectively with their capital.
The average cross-border transaction fee at Western Union is estimated at 7 percent. SendFriend has said it would reduce the cost to around 2 or 3 percent. Having spent many years at the World Bank, Layton said it was very difficult to send money from one region to another in the event of an emergency. He said this should never happen again when financially disadvantaged people need to send money quickly to their families living overseas.
The xRapid product is Ripple’s newest digital product that offers a real-time settlement platform for international payments. The technology is built for commercial use and is backed by Ripple’s native token XRP. According to Ripple, xRapid significantly reduces liquidity costs. Payment companies like Catalyst Corporate Federal Credit Union, Cuallix and Mercury FX are already using the xRapid platform. Whether or not xRapid will help SendFriend reduce cross-border transaction costs remain to be seen.