Ripple wants to make inroads into Brazil’s remittances market.

Ripple is a global leader in enterprise blockchain solutions for cross-border payments. It established an office in Brazil in June 2019 as a stepping stone to the vast South American market. It brought in the highly experienced entrepreneur and executive Luiz Antonio Sacco as managing director.

The fintech now wants to expand its relationships with Brazilian banks and regulators to increase and improve its remittance services, according to Reuters Brazil. That’s because demand for fast and cheap remittance solutions is growing rapidly in Brazil.

Swift, the legacy system, is slow and expensive

The lion’s share of international remittances out of Brazil currently uses the SWIFT system. This market amounted to nearly $ 4.6 billion in 2090. Unfortunately, SWIFT remittances can take almost a week to complete and are fairly expensive. In contrast, transfers via Ripple would cost just 10% of the amount charged by banks, says Sacco.

Ripple already has onboard Santander, Bradesco, Rendimento, and other Brazilian banks.  New business relationships with more banks will enable Ripple to take market share faster from SWIFT. “With the successive advances in Brazilian banking regulation to facilitate financial transactions, including at an international level, the opportunities here will grow strongly in the coming years.”

Though most of these relationships currently utilize Ripple’s payment messaging system, the fintech is determined to boost acceptance of its XRP cryptocurrency within the banking system in Brazil and South America. “Our vision is to use digital currencies as a medium of exchange, not as a speculative investment,” says Sacco.

Ripple: fund-raising and investments

Earlier this month, Ripple raised a massive $ 200 million series C funding which it plans to use to grow its customer base by 30 to 40%. It further plans to increase its transaction volume by 600% in 2020.

In November last year, Ripple acquired a $50 million stake in remittance platform MoneyGram. It, therefore, owns just under 10% of MoneyGram’s outstanding common stock and approximately 15 percent on a fully-diluted basis including non-voting warrants. Under the agreement, MoneyGram will utilise Ripple’s products for cross-border settlements.

In October last year, Ripple invested in Bitso, a leading cryptocurrency broker and exchange in Latin America.

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