In 2014, Bitso’s founders believed that blockchain technology and digital assets could improve financial access for Latin America’s large underbanked population. A key step in realizing this vision was the company’s partnership with Ripple to deliver instant and affordable cross-border payments to Mexican businesses and retail customers.
“With the help of Ripple, Bitso is currently the largest exchange in Latin America,” said the company’s chief financial officer, Bárbara González Briseño. “We have the world’s largest Mexican peso liquidity for digital assets and are MoneyGram’s premier exchange partner for money transfers to Mexico.”
After more than a decade in various financial positions, Briseño has extensive personal experience with the difficulties of sending money outside of Mexico. Traditional bank transfers are not only time consuming and expensive, the process is also fraught with friction and uncertainty.
“I knew that every time I had to pay a global supplier it would be a hassle,” she recalled. “To set up the transfer, I had to fill out a form, sign it, scan it and send it to the bank, then wait days for them to buy the dollars needed to make my payment. I never knew what point in the process was when the supplier would receive the money. This is my experience as a corporate customer. This is an even bigger problem for retail customers, especially families whose rent, groceries and education costs depend on remittances from relatives working abroad. “
Working together to create a faster, more affordable solution for cross-border payments
Towards the end of 2018, Bitso began working with Ripple to develop and test a solution to the problem of slow and expensive cross-border transfers from the US to Mexico. Using RippleNet’s On-Demand Liquidity Service (ODL), the company can convert US dollars into the XRP for digital assets and then send the XRP through Bitso’s banking partners, where it is exchanged for Mexican pesos in less than a minute.
“ODL is amazing,” said Briseño. “The transaction is instant, much cheaper, and you know exactly when the recipient will receive it. Just a few months after starting work with Ripple, we were able to offer our partners a fully functional solution. Since July 2019 we have seen a significant increase in acceptance and the volume of transmission that we enable. “
A typical transfer costs more than five times what Bitso’s partners now pay when they exchange ODL with RippleNets. Briseño believes this is a change for corporate customers as it fundamentally changes the way companies manage their working capital. But it is the end customer who will really experience the value of faster, cheaper cross-border transfers.
“There are millions of migrant workers in the US who are sending money back to Mexico,” she said. “Their families often survive on these transfers week after week, so the immediacy of ODL compared to the traditional process that took days is important. Plus, the cost is a fraction of the transfer fee, so more of the sender’s hard-earned money gets back to their family. “
Connect a single network with instant value
With more than 11 million Mexicans living in the United States, Bitso estimates the remittance market between the two countries is valued at $ 35 billion annually. In 2019 Bitso gained 1.5% of this market and aims to increase its share ten times over 2020 through the use of ODL, while expanding to other valuable corridors across Latin America.
“Our vision is to improve financial access across the region,” concludes Briseño, “and we are now looking at other popular corridors such as Brazil-Argentina, Colombia-Brazil and the US-Peru. We want all of Latin America to be a single network connect, in which everyone can carry out transactions immediately and inexpensively, whenever this is necessary. Ripple shares our vision of creating an accessible and valuable smooth exchange for our partners and their customers with its innovative technology.