Mexican crypto exchange Bitso now processes 2.5% of remittance transactions from the United States to Mexico, the third-largest remittance market in the world. Bitso head of finance Bárbara González Briseño attributes this to the company’s partnership with Ripple.
“It’s this solution that we’re offering to all of our customers, partnering with Ripple and trying to take over the remittance corridor from the US to Mexico.”
Ripple’s On Demand Liquidity (ODL) solution for remittances utilizes the cryptocurrency XRP. A cross-border payment powered by Bitso works by converting dollars from the US into the digital currency XRP and then converting the XRP to Mexican peso for the recipient in Mexico.
“Instead of going through a wire transfer and going to the bank and calling someone to help me fix all the different details and waiting for five days, I can use ODL where the dollars turn into XRP, and the XRP are sent into Bitso, and they’re immediately exchanged for Mexican pesos.
In the span of less than a minute, I have my money in the Treasury and at a rate that was more beneficial for me and a cost effective transaction.”
Briseño says ODL changes cross-border payments in Mexico, where large portions of the population remain unbanked and remittances are traditionally slow and costly.
“We usually tend to see that a transaction, as we’re seeing through ODL, used to cost more than five times what it’s actually costing them right now, so I think that is one amazing advantage of the product.
Another one is settlement, which is almost immediate, which you don’t see by any means in the traditional financial system, and how it has operated for many, many years.”
Briseño says Bitso and Ripple’s partnership offers an opportunity to change how international payment are done.
“Ripple plays an enormous part on that customer front with the partners that are actually sending the cross-border payments and remittances, but we have seen adoption, and we have seen adoption not only from players that are already in the space.
We’re also seeking adoption from players like MoneyGram who were very traditional players, were doing things a very different way, and that are now one of the most important partners for us.”
We want to do it the same way, a very similar way. I think we all dream about changing how payments are done in the region and the world, how we can interact with each other.”
Featured Image: Shutterstock/Inked Pixels