Western Union CEO, Hikmet Ersek, declared yesterday about how the pilot program that they have adopted for the use of Ripple, a cryptocurrency adopted for banking remittances, has not achieved the level of savings that they hoped. These statements were made in an article written by Fortune.
Western Union is touted as one of the more traditional an trusted remittance services in the whole world; using their services you can send money worldwide by leveraging their enormous number of offices. Western Union achieves this by having enormous quantities of capital in international accounts offering services that promise to deliver money across countries in minutes; this has often been criticized by their detractors, that say that it is highly inefficient.
But now, after using the Ripple test program, Hikmet Ersek says that the savings are just not there yet to justify a total change in their business model. He declared:
“WE ARE ALWAYS CRITICIZED THAT WESTERN UNION IS NOT COST-EFFICIENT, BLAH BLAH BLAH, BUT WE DID NOT SEE THAT PART OF THE EFFICIENCY YET DURING OUR TESTS”
He also said that while in theory making these payments with Ripple should be saving costs to Western Union, in the real world, there are no savings whatsoever. But Asheesh Birla, Ripple’s senior vice president of products, has another view on the subject.
He thinks that most of the operational savings come from leaving behind the old business model and adopting a new perspective; he refers to cutting unnecessary personnel and infrastructure abroad. By cutting these costs, he thinks that the efficiency of the platform can be shown. He also criticises that only 10 operations with Ripple has been made so far, and only between two fiat currencies: Mexican pesos and American dollars. Indeed, with a pilot run so limited, it is very difficult to predict or calculate possible savings on a larger scale.
Still, Hikmet Ersek declares that their protocols are efficient; and that right now, replacing them will yield no value whatsoever to the business.