Over 100 financial institutions have jumped aboard the blockchain train, joining Ripple’s enterprise network known as RippleNet. Some of the newest members include TransferGo, AirWallex, Bexs Banco and Currencies Direct.
"Global payments are undeniably going through a sea change, led by financial institutions adopting blockchain to fix their customers' broken payments experience. Now more than 100 financial institutions are looking to Ripple as the solution to the problem. Updating their payments infrastructure with Ripple has become the equivalent of a retailer choosing to build an e-commerce business in the year 2000 — it's a no-brainer,” said Ripple CEO Brad Garlinghouse.
Ripple’s success in onboarding its clients comes from its transaction model. It works with a blockchain that can handle large volumes of financial data and doesn’t necessarily require its proprietary token cryptocurrency—also named Ripple (XRP)—to process transactions.
In principle, this means that an institution could pay someone in any number of currencies without possessing them (i.e., paying someone in Bitcoin but using U.S. dollars to make the payment).
In a Q&A hosted by Quora, Garlinghouse was asked what sets XRP apart from other cryptocurrencies. In his answer, he revealed that unlike Bitcoin’s blockchain—which can process around 15 transactions per second—Ripple could fly through over 1500.
“While I’m personally long [sic] BTC and a believer that it’s solving a different use case, the reality is that today the average time to complete a BTC transaction is about 4 hours,” he said.
Garlinghouse has also added that while BTC transaction fees are measured in dollars, XRP fees are measured in fractions of a penny.
Ripple has already prepared its infrastructure for banks with its xCurrent product, which allows larger financial institutions to settle cross-border payments in a fraction of the time it would take them to do so in a traditional setting. Businesses can also use xVia, designed for corporations to process payments to their employees and freelancers around the world.
Some significant clients of Ripple include Bank of America Merrill Lynch, the Canadian Bank of Imperial Commerce and the Royal Bank of Canada.
Cuallix, a Mexican bank that processes payments between Mexico, the U.S. and Hong Kong has also recently joined the Ripple network, making it the first worldwide institution to use XRP to lower the fees involved in transferring funds from the U.S. to Mexico.
Ripple’s platform may be young, but it seems to have already demonstrated that it can handle its job successfully as banks continue to enter the network to make their payment processing more transparent and fluid.