Popular Credit Card giant, Visa Inc. has just purchased the ownership of payment network and Ripple partner, Earthport Plc, for £198 million ($251 million).
According to a recent report by news outlet, Reuters U.K, Earthport who signed a publicized partnership deal with Ripple in its unveiling of the first ever of Distributed Ledger Hub, has now been acquired by Visa Inc. after a series of important events.
The purchase sees Ripple expanding into new regions, and the impressive milestones it keeps conquering among financial giants show no signs of abating.
Earthport entered a partnership deal with Ripple in January 2016 to unveil the first ever Decentralized ledger Hub (DLH) among companies offering financial services and set the pace for other financial institutions that would throng into Ripple’s club of blockchain-enabled banking services later on.
SWIFT—Society for Worldwide Interbank Financial Telecommunication—itself had discarded the potential of Ripple and blockchain technology in the financial or banking sphere, and had downplayed the benefits the technology could offer to banks and financial institutions across the world.
Well, since Earthport’s partnership with Ripple, more than 100 institutions under the “SWIFT” umbrella have disagreed. Brad Garlinghouse, CEO of Ripple, couldn’t resist poking a jab at the initial resolutions conceived by the SWIFT body a few years before. He said in November:
“SWIFT said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.”
Earthport’s partnership with Ripple saw a significant improvement in efficiency and solution to earlier besetting problems. While traditional cross-border payment methods could be slow and unpredictable in its price and delivery, Earthport’s blockchain platform allows direct access to local banks and removes hidden complexities and non-transparency that comes with traditional platforms. The company uses a single API (application program interface) to settle funds with local banking partners which include prominent institutions like Payoneer, Bank of America and Ripple itself.
How Earthport Fits into Visa’s Strategy
Visa Inc. bought Earthport’s shares four times its closing stocking price, as the company seeks to expand its cross-border payment services. Visa sees Earthport has the best solution to expanding its cross-border payment services given the sector alone saw an impressive 10% improvement in revenue in 2018. That Earthport was also having internal struggles of its own—2018 has seen Earthport’s shares decline by more than 28 per cent—made the acquisition easier and better suited for both parties.