Solving the Challenge of Moving Money Globally
Recap of a talk from Asheesh Birla, SVP of Product at Ripple, at the (Off) The Chain Summit presented by Pillar as part of Boston Blockchain Week.
About Ripple
Asheesh Birla is the SVP of Product at Ripple, a company that aims to transform the way money is moved globally. Founded in San Francisco in 2012, Ripple saw the fundamental issue with legacy payment systems. Asheesh shared his thoughts with us on the opportunity for blockchain to transform the payments industry at our recent blockchain summit.
“Back in 2012, you could actually watch YouTube on a space shuttle, but if you want to send money to the UK, the fastest way is to get some cash, get a suitcase, and take a British Airways flight,” explained Birla.
Ripple saw this as a huge opportunity to tackle payments from the infrastructure layer up. It was clear that the friction that came along with transferring money globally needed to be removed, so the company set out to get it done. Birla recalled, “One of the bets we made early on was that financial institutions are going to be an integral part of any payment that we wanted to be on.” With an understanding of the important role these institutions would play, Ripple secured a blend of traditional venture funding from firms including Andreessen Horowitz and Google Ventures, as well as strategic investors from banks and institutions.
The company noticed early on that new age e-commerce companies and marketplaces have new age demands when it comes to sending money across the globe. Whereas before, it took years to become a global company, Airbnb, Uber, and the like were suddenly in 40 cities in a very short amount of time. “That’s unprecedented,” says Birla, “They have a real time experience, and they need to give their drivers and their hosts a real time payment experience.”
Birla remarked that an uninterrupted payment experience is so critical to Uber that if they lose an international driver payment due to the complexities in sending money internationally, they just send another one. In this new paradigm, there’s no tolerance for delays or missed payments; the payment experience is critical to customer experience.
The Global Payment System is Broken
Anyone who has tried to move money internationally knows the hassle. Sending a text to India, for example, takes a matter of seconds, yet sending a payment can take days, even weeks.
To expedite the process, companies like Amazon and Uber have built their own payment infrastructures to deal with demand. “There’s nothing out there that helps these companies move money globally, and that’s the underserved market for our initial insertion point at Ripple,” explains Birla.
But why aren’t the banks moving in this direction? “Banks are under heavy regulation globally and they are actually reducing their reach and reducing their footprint,” explains Birla. “You see the need for ecommerce payments growing one way but the actual coverage from the traditional players going the other way.” This is where Ripple sees the opportunity.
The Ripple Solution
Ripple didn’t want to become just another payment network. Instead, they wanted to actually connect the payment networks, traditional institutions, blockchains, different wallets, etc. into one streamlined experience.
To do this, they’ve three launched products:
- xCurrent: Sold to financial institutions and banks, this product focuses on quick and simple settlement of funds. Banks are able to communicate in real time, sending KYC (know your customer) details, screening details, and more.
- xRapid: This product, sold to payment providers, allows for fast liquidity when sending payments globally. “We are using digital assets — XRP is one of them, to move money globally,” explained Birla. The way it works is that the liquidity is sourced from a local fiat, USD for example. The USD gets traded into a digital asset such as XRP. XRP then gets moved into the foreign country and immediately traded for the new local fiat and paid out.
- xVia: Launched at the end of April, xVia enables businesses to use this new payment technology by offering a simple API that allows users to send payments across the globe on the Ripple network
This is the Ripple experience. Birla concludes, “Instead of integrating into all those different providers across the world, use one standard product and interface and let us handle the complexity.”
Written by: Katie Mulligan
