News broke yesterday at the Milken Institute’s Global Conference 2015 that Western Union is planning an “experiment” with Ripple Labs, the group behind the Ripple protocol.
In Oct. 2013, when Ripple struck a deal with the money transfer service ZipZap, it was called a threat to Western Union. At that time, Western Union had no comment.
But now the money transfer giant appears to be willing to look at Ripple’s distributed ledger value transfer tool, which can move money far more cheaply than Western Union — and more quickly.
Where Western Union may charge $40 to send $500 overseas, Ripple can cost nearly nothing. It is simultaneously a threat and opportunity for businesses moving money across international boundaries.
The Ripple ledger can be compared to bitcoin’s blockchain, which is having a moment these days. Witness the Inside Bitcoins conference, taking place now in New York, which offers a “Blockchain agenda,” to discuss non-bitcoin-specific virtual currency issues. It is widely agreed that the blockchain is bitcoin’s killer app — a way to safely move value inexpensively and rapidly.
Ripple’s success with banks confirms this. The Ripple ledger can move any kind of value across it, not just ripples. the company’e proprietary currency, which inevitably attracted the most attention when Ripple launched in Feb. 2013 as OpenCoin.
When Chris Larsen introduced Ripple at Finovate Spring 2013, he said ripples and bitcoins were new global currencies, but more importantly, they were networks for moving money. It took a while for everyone else to catch up to this idea.
Western Union, to its credit, took less than two years to come to the conclusion that Ripple was worth taking a closer look at.
CoinDesk’s take on the news features an interesting comments thread in which bitcoin loyalists duke it out with Ripple-istas — quite entertaining, if you’re into that sort of thing.