FRISCO, Texas–Catalyst Corporate FCU has announced a partnership with Ripple that it says should provide credit unions with access to fast, reliable, cost-effective blockchain payments in the future.
Ripple is a leading enterprise blockchain solutions provider for payments. Catalyst Corporate announced the new partnership to approximately 300 attendees at its annual Future Forums conference at the Dallas-area Omni Frisco Hotel.
Blockchain is an open distributed ledger system that confirms cryptocurrency transactions between two parties in a permanent, verifiable way, noted Catalyst, while Ripple is a global blockchain provider with offices in San Francisco, New York, London, Sydney, India, Singapore and Luxembourg with a network of 100+ banks and payment providers worldwide. XRP, an independent digital asset, which Ripple uses in its product xRapid, is the world's second largest cryptocurrency by total market capitalization, boasting a market capitalization of $22.2 billion, the organizations reported.
Initial Plans
Catalyst Corporate said it will explore Ripple’s blockchain solution initially to overcome a number of challenges credit unions and their members face with international wires.
“The traditional international wire experience fails to meet today’s expectations from a price, speed and ease-of-use perspective,” said Brad Ganey, Catalyst Corporate’s senior vice president and chief operating officer. “Blockchain technology, and specifically Ripple’s xRapid product, resolves all three of these challenges simultaneously. Through our subsidiary companies’ technology platforms, Catalyst Corporate will leverage XRP – through xRapid – to test the instant transfer of money across borders on behalf of our member credit unions. We have signed a production contract and are currently building out our test plan.”
Demand for Remittances Grows
Catalyst Corporate noted that despite challenges faced with international wires, demand for global remittances continues to increase.
“For example, U.S. global remittance flows from the U.S. to Mexico totaled $28 billion in 2016. Research indicates that, based on migrant population data, up to 27% of Catalyst Corporate’s membership is located in markets with a high demand for international remittances,” the corporate said. “Many of these transactions are initiated by underbanked populations at money centers. These wires are costly, and delivery can take days or even weeks. Latest Ripple can reduce that time to minutes, giving credit unions the opportunity to compete in these markets. Ripple’s average xRapid payment from the U.S. to Mexico takes less than three minutes.”
As such, Catalyst Corporate will target sending its first international transaction via Ripple’s network to Mexico, Ganey said.
Approaching $1 Trillion
Blockchain transactions could offer credit unions additional opportunity, as well, considering cross-border e-commerce transactions are expected to reach almost $1 trillion by 2020, according to Catalyst Corporate.
"Our goal with xRapid has always been to bring our customers faster, cheaper and more reliable global payments,” said Asheesh Birla, SVP of Product at Ripple. “With Ripple, Catalyst Corporate will be able to source liquidity and send payments on demand using xRapid. That will not only improve their business, but also the lives of credit union members who – many times – are sending lower value remittance payments to their loved ones."