SendFriend Remittance Startup Raises $1.7 Million Towards Lowering Fees with Ripple’s xRapid


Fees are one of the major issues that always arises in the remittance market, which seems like something small to be targeting. However, based on 2016 statistics from the World Bank alone, $575 billion was sent by migrant workers in remittance. Of that amount, $429 billion was transacted in developing countries, paying 7% in remittance fees.

Overall, that means that migrant workers and others paid a total of $40 billion. However, there are some areas with even higher fees at 15.76%, but that’s where SendFriend comes in.

SendFriend is a project by David Lighton, who formerly worked with World Bank. The program is a remittance service that provides a discounted fee on these remittance transfers with as much as a 65% less cost to the user. In an announcement on Monday, SendFriend revealed that they had received funding contributions from MIT Media Lab, MasterCard Foundation, Barclays, and Ripple, adding up to $1.7 million in capital.

Presently, SendFriend is targeting services in the Philippines for local users to have fast access to sending and receiving transfers. The startup is still working on the launch, which could be as far as six weeks away, due to a pending money transfer license application in New Jersey.

Lighton explained that the choice to start in the Philippines was based on their welcoming regulatory framework, and the fact that partner Ripple already has connections in the area.

The Ripple Foundation is well known amongst consumers in the cryptocurrency community, offering payment infrastructure and blockchain tech solutions to customers and clients. The main product that Ripple uses to connect banks is Ripple Net, an entire network of their partnered banks, exchanges, and participating retailers to make payments a seamless process.

As soon as SendFriend’s program is active, they will be considered the first consumer partner of RippleNet to be established in the US, as their licensing would come from New Jersey. The program plans to also use xRapid to support liquidity and the XRP token to settle payments.

Many companies have been working to offer fast and inexpensive solutions for cross-border payments, but without blockchain, like TransferWise. However, Lighton pointed out that TransferWise does not have support for unbanked migrant workers, which is one of the main reasons that these workers have to use cryptocurrency in the first place.

Lighton claims that TransferWise’s low fees are due to the conversation from international transaction to local transaction, which means that they settle everything as a middleman. However, if the two countries that TransferWise wants to connect are not balanced, the firm would need more currencies and the fees would raise anyway.

This is not the case with SendFriend, because xRapid can be leveraged for an instant settlement with XRP as a bridge currency.

The lack of support that Lighton cites is because any user on the TransferWise platform is required to use their bank account in the transaction. Thus, someone without a bank account cannot use the service, which is detrimental to the 77% of Philippines adults that cannot get a bank account. SendFriend has “cash partners” that basically pay out the cash after going through the KYC process.

A PIN code is used as verification to receive the payment from a SendFriend cash partner, which is often a pawn shop or a convenience store in the area that SendFriend is already connected with. The cash is paid out and the recipient is paid.

Even though XRP is being used as part of the process, Lighton is clear in telling The Block in their article that SendFriend is “not a cryptocurrency company.” This is primarily due to the fact that users will ultimately not have to directly interact with cryptocurrencies during their transactions, which is Lighton’s ultimate goal. For now, it seems like XRP is a necessary part of the process.

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