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TransferWise Won't Buy Into Blockchain Until More Banks Use Ripple

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The title of the article is a bit misleading (Fortune is obviously going for clicks), but the 10 minute video interview is really good.  It provides some great insight, from a Ripple customer's perspective, on the cross border payments market.  Taavet Hinrikus, cofounder and chairman of TransferWise (which processes $3.9 billion of transactions per month for its 4 million users), comes across really well which is to be expected considering how successful his company is.  

http://fortune.com/2018/11/19/blockchain-ripple-transferwise/

Quote

“We’ve heard this dream many times from different people. However if you start digging into it, you realize that it may look great on paper, but in reality, to make use of it, it’s really hard,” Taavet Hinrikus, cofounder and chairman of TransferWise, says on the latest episode of Fortune’s “Balancing the Ledger.”“We’ve looked at different blockchain technologies, but yet we haven’t found anything which enables us to do what we do in a way that is cheaper or faster.”

TransferWise can move money from Australia to the U.K. in 15 seconds while charging a fee of 1% or less, whereas it would take days (and likely cost more) to make the same transaction at a bank, Hinrikus explains. What’s more, TransferWise has been profitable for two years in a row despite its low fees, he adds.

“If every bank in the world was going through the Ripple network, it would be amazing. Yet how many banks are using Ripple today in production? It’s a very short list,” Hinrikus says. “In that sense we’re big supporters of Ripple or anything else…and if any of these gets enough adoption, and it actually materially helps us do things cheaper and faster, we’d love to, but so far we haven’t found one.”

 

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It's a matter of time. It's a snowball effect. He knows this for sure.

The cat isn't out of the bag yet. It's just poking it's head out 😂

But it's coming. Snowball will turn into an avalanche. I'm beyond convinced at this point. Thank God I found this investment. My small batch could pay off my mortgage in due time... patience is a virtue. 

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50 minutes ago, SaladFingers said:

"TransferWise can move money from Australia to the U.K. in 15 seconds"

I'd be interested to see their transfer times between other countries, NZ to UK takes closer to 15 hours. I'm guessing there are only limited corridors they can process so quickly which is where their interest in DLT lies.

UK to South East Asia can take three days if you send it on a Friday. TW CSR: "Banks are closed on weekends, not our fault."

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it may look great on paper, but in reality, to make use of it, it’s really hard,” Taavet Hinrikus, cofounder and chairman of TransferWise

No getting round it; it is a disappointing comment!

It does not really make sense to me because Ripplenet makes the choices for the user between using DA's and using XCurrent and chooses the cheapest fastest route.  Surely there will be times when it is very easy and efficient to use DA's instead of slower more costly methods, and other time when it is easier to use traditional methods.  The more Ripplenet gets used teh more corridors will open up.  Perhaps he is behind the times?

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1 hour ago, Julian_Williams said:

No getting round it; it is a disappointing comment!

It does not really make sense to me because Ripplenet makes the choices for the user between using DA's and using XCurrent and chooses the cheapest fastest route.  Surely there will be times when it is very easy and efficient to use DA's instead of slower more costly methods, and other time when it is easier to use traditional methods.  The more Ripplenet gets used teh more corridors will open up.  Perhaps he is behind the times?

I think what it is is that FIs with large well established legacy infrastructure that have spent years and years optimizing their legacy systems for quick payments and settlement have a lot of overhead and switching to a new system would involve a lot of changes, including incurring losses and taking on a new set of risks. They want to commit to a clear leader in this space with a proven track record. I think it's still way too early for them to commit to such a new technology with insufficient liquidity needs for their large-scale use and with things currently being so turbulent in this space. You can't run a business with all this chaos going on around you if a clear well established and stable blockchain leader for your needs hasn't emerged yet.

 

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I'm hoping Binance switches to or at least supports xrp as a base currency pair.. this will hopefully be the final nail in the coffin to decouple xrp from Bitcoin and hasten the flippening.

Edited by enrique11

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2 hours ago, Julian_Williams said:

it may look great on paper, but in reality, to make use of it, it’s really hard,”

My impression was that comment pertains to xRapid, cross border payments. As of now we know the liquidity isn't well established in many corridors. This explains "it may look great on paper, but in reality.."

With TransferWise, my sense is, Ripple gave them the software to try out? Also TransferWise's is completely online. No brick and mortars.

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https://www.ccn.com/transferwise-we-wont-use-blockchain-until-more-banks-use-ripple/

According to Hinrikus, TransferWise has examined Ripple’s high-speed, cross-border payment solution, RippleNet, and has found no compelling reason to use it given its current level of adoption.

Explaining why this is, he remarked:

“If every bank in the world was going through the Ripple network, it would be amazing. Yet how many banks are using Ripple today in production? It’s a very short list. In that sense we’re big supporters of Ripple or anything else…and if any of these gets enough adoption, and it actually materially helps us do things cheaper and faster, we’d love to, but so far we haven’t found one.”

Edited by TokenBaby

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3 minutes ago, TokenBaby said:

https://www.ccn.com/transferwise-we-wont-use-blockchain-until-more-banks-use-ripple/

According to Hinrikus, TransferWise has examined Ripple’s high-speed, cross-border payment solution, RippleNet, and has found no compelling reason to use it given its current level of adoption.

Explaining why this is, he remarked:

“If every bank in the world was going through the Ripple network, it would be amazing. Yet how many banks are using Ripple today in production? It’s a very short list. In that sense we’re big supporters of Ripple or anything else…and if any of these gets enough adoption, and it actually materially helps us do things cheaper and faster, we’d love to, but so far we haven’t found one.”

If you look at the logic behind his statement, his argument isn't strong. Chicken and egg scenario. Would be the most amazing thing if people used it but we won't use it till people use it....... Difference is that Transferwise is no WU or Moneygram. It is essentially a startup. Believe they began operation in 2011. They are exactly the type of money transfer system XRP is looking to help. Sunk cost for implementing the system is not a high benchmark for Transferwise compared to WU. I hope that Ripple increases the infrastructure price of XRapid once it takes off so high and mighty companies that refused to evolve go to the wayside and start-ups with low fees take over a high market share. Bye bye WU and Transferwise. I think the jury is still out on Moneygram. 

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