Ripple Paving the way for overseas payments to Mexico and Philippines
Ripple’s involvement in the world of overseas remittance has taken another step forward after meeting with the Jalisco state Government (Western Mexican State). The Ripple twitter posted this update regarding the official meeting on 19 March 2019. These meetings were held to resolve issues regarding the adoption of blockchain technology in Mexico.
As stated by the twitter post “Jalisco State Government met with team Ripple to discuss how Mexico is leading the charge in #blockchain and #fintech innovation.” Over a year ago, Mexico became was already one the largest Fintech ecosystems in Latin America, with 238 companies. By September 2018, the ecosystem had grown to well over 334 companies. This sizeable increase in Fintech startups is however accompanied by a substantial mortality rate.
Fintech space in Mexico
Based on Fintech Radar Mexico in collaboration with the Inter-American Development Bank, 29 startups ceased operations, but have been generously balanced by the formation of 125 new companies in the country. This increasing number of startups is hopeful for the Fintech space, but more of these companies need to reach maturity to make an impact.
The composition of these can be split into 6 main segments, Payments and Remittances, Lending, Enterprise Financial Management, Personal Financial Management, Crowdfunding and Enterprise Technologies for Financial Institutions.
The highest proportion of these companies lie in the Payments and Remittance segment, sitting at 23% of the total, or 75 companies. With this rise in Fintech innovation spreading on a global scale, it is not surprising to see Ripple’s involvement in the efforts of Mercury-fx to provide cheap pathways to overseas payments and remittance.
For information and stats on Mexico’s Fintech space, the full report can be found here
The role of Ripple’s xRapid in all of this
With that in mind, there will always be major forces that need to be addressed before stabilized growth can occur in the Fintech Industry. A major player in any country would be its government. In March 2018, Mexico’s government put in place Fintech Law aimed at regulating these institutions. It was the first in the Latin America region to do so. Objectives of these laws include offering greater legal certainty through a legislative framework of regulation, as well as ensuring a fair competition landscape between Fintech companies and traditional financial institutions.
It may be restrictive to be bound by the laws of the land, and some might argue that these laws are misaligned with the fundamental concept of blockchain. What we do see however, is the idea that the Fintech sector has a part to play in driving future growth and innovation of Mexico’s economy. If regulations are kept too stringent, the technology that could give Mexico and the rest of Latin America a greater presence on the international markets will be hindered.
Thus, the actions taken by Ripple to hold an official meeting with the Jalisco State Government could prove to be successful in breaking down these hindrances. Or at least lower the barrier. This may have trigerred the recent twitter post by Mercury FX only a day later (20 March 2019), who uses Ripple’s xRapid as a platform to make overseas payments and remittance.
The progress of Mercury FX with the help to xRapid
The post was a statement from Mercury FX’s CEO, Alastair Constance. “We are actively working with Ripple to market to expatriate Filipino and Mexican communities, but also to companies doing those channels.”
XRapid’s payment channels into Mexico and the Philippines have taken effect, but all Mercury FX‘s CEO can disclose for now is that “they are moving tens of thousands of dollars with xRapid WEEKLY today…” Up to this date, two notable xRapid payments by Mercury FX took place within the last 3 months. First was the payment of $4,574 from the UK to Mexico, which served its purpose of quick payment at low fees for the company. Second was the recent payment just 2 weeks ago, from the UK to the Philippines in regards to a client’s payments for his honeymoon.
The effect of xRapid in bridging the gap of overseas payments and remittance has only just begun. There are plans by Mercury FX to create as many as 10 new pathways using Ripple’s xRapid, ranging from countries such as Canada to the Middle East. Mercury FX’s remittance service handles $1.8 billion around the world each year. When people from different international markets begin fully utilizing this service, we may see this number grow rapidly.