• A Credit Suisse report reveals that Western Union, the global leader in cash and account-to-cash transfers, continues to test Ripple and the XRP token.
• According to Credit Suisse, Ripple and its XRP technology have the potential to shorten processing times and generate savings in the B2B market.

In a research report published by Credit Suisse at the end of January 2020, the investment bank states that Western Union continues to see potential in the cryptocurrency XRP and is testing its use cases. According to the report, Western Union, the global market leader with a 17% share of cash and account-to-cash transactions, continues to conduct tests:

Also evaluating Ripple ,although initially was less bullish, trials continue.

The report comes as a surprise, as Western Union was not very enthusiastic about Ripple and its payment technology for the XRP token last year after several months of testing. In an interview, Western Union’s CEO Hikmet Ersek explained at that time that the company operates its own transfer system, which enables transfers five times cheaper than XRP.

On the other hand, in February 2019, Molly Shea, the company’s director general for Asia-Pacific, said that Western Union will use cryptocurrencies if they prove to be more efficient and cost-saving:

When you think about cryptocurrencies, if those start to take off, we need to be ready. We need to be ready from a technology perspective. And we’ve got to be ready from – regulatory has to be there – but we constantly have to be looking for those trends where customers are looking and make sure that you’re ready to meet those needs and expectations.

Credit Suisse sees Ripple use in the B2B market

The Credit Suisse report goes on to say that cryptocurrencies, such as XRP, will initially have little impact on the C2C (consumer-to-consumer) market. Existing platforms such as Transferwise, Remitly or Western Union have already developed global systems that enable real-time cross-border C2C payments at relatively low costs, according to the study.

However, the report also identifies a potential for payments to and from emerging markets. As the report states, matching (“netting”) works very well for high-volume countries, such as the G10 industrialized countries. In emerging markets, however, “the challenges remain in the currencies of lower volume emerging markets”.

Credit Suisse also sees little potential in the area of C2B payments, between consumers and businesses, as cryptocurrencies “will not find acceptance”, at least not in the medium term. In contrast, Credit Suisse continues to argue that the B2B area between companies offers enormous potential for growth, as existing solutions require long processing fees and transaction times.

Up against an existing bankwire transfer (SWIFTmessaging) system that is viewed as less than ideal and utilizes multiple correspondent banks per transaction, resulting in uncertain timing (3-5days), high (and also uncertain) fees, and high failure rates. Platforms like Ripple have the potential to reduce settlement times (from days to seconds) and provide savings (low bps, but large absolute dollars)

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