xRapid Solution – Reducing The Cost Of Remittance Costs For All-Inclusiveness
While making payments faster is one of the fundamental objectives of digital currencies, Ripple (XRP) desires to offer more than swifter transactions. To this end, the Ripple team intends to establish an Internet of Value, which is essentially a network which facilitates the seamless interchange of value in a similar way to the web. By deploying the Internet of Value, Ripple aims to move value instantly and at affordable or zero costs.
Undoubtedly, the Internet of Value has an enormous potential for disrupting various aspects of the economy. Regardless, its effects on the user are more significant in comparison. Concerning this, the Ripple team has developed the xRapid solution which seeks to revolutionize the global remittance market for the good of consumers around the world.
The Current Situation In The Global Remittance Market
On a yearly basis, transactions on the global remittance market amount to $600 billion. Moreover, these payments attract charges worth a whopping $30 billion, even though a majority are often below $500.
According to industry data, most of the payments mentioned above originate from persons who work in the developed world and are usually sent to their kin in impoverished countries.
The Benefits Of The xRapid Solution
After the initial tests conducted on the xRapid solution, the results showed significant promise. Specifically, the solution proved useful to financial institutions, as it saved substantial amounts of money in foreign exchange transactions. Theoretically, these savings can apply to the sender’s end in remittance payments.
In the future, additional firms will embrace Ripple's xRapid solution, leading to an overall decrease in the cost of payments. Essentially, the mass adoption of xRapid will create a ‘perfect competition’ resulting in a fair pricing model which benefits the user. Besides cheaper costs, payments will become considerably faster.
As mentioned earlier, the fees levied on global remittance transactions amount to $30 billion annually. Suppose xRapid manages to save the purported 55%, it would amount to a yearly saving of $16.5 billion. If this saved amount is directed to the remittances, it would substantially alleviate the living conditions of the recipients.
Evidently, the reduction of charges imposed on remittance payments has several potentially positive effects on the livelihoods of individuals. Also, it is a significant step towards the realization of the initial objectives of digital assets, which is to serve the underprivileged without bias.