Payment solutions provider AstroPay has launched Ripple LatAm, Latin America’s first licensed money service business to use the payment network established by Ripple Labs.
Ripple LatAm will serve consumers and developers in seven markets, including: Argentina, Brazil, Chile, Colombia, Mexico, Peru and Uruguay. The service aims to help consumers sending payments across borders, while also allowing developers to build remittance platforms using Ripple’s technology.
Andres Bzurovski, founder of Ripple LatAm and recent Bitcoin Foundation board member candidate, told CoinDesk he believes the new initiative will provide a solution to common money transmission issues in the region.
Though he believes the platform will appeal to consumers and developers, Bzurovski expects the company to have the biggest impact on the business-to-business market, stating:
“Ripple LatAm effectively opens the region for business, allowing for real-time B2B cross-border payments between markets in each partner’s currency of choice. Now, a European-based business can send euros to be received as Brazilian real by a business in Brazil within seconds and at a fraction of the cost.”
The news marks the latest major announcement from online payments specialist AstroPay, a former partner of infamous Japan-based bitcoin exchange Mt. Gox. AstroPay boasts 600,000 customers and an established infrastructure in what is increasingly being seen as an important region for digital currency expansion.
Leading in Latin America
Founded in 2009 with a focus on online payments, AstroPay has moved quickly to embrace digital currencies and the role they could play in improving the economic abilities of consumers and businesses in Latin America.
The AstroPay founder told CoinDesk that Ripple LatAm is just one of three planned digital currency endeavors in development at the company, though he did not provide further details on future announcements.
Bzurovski said his time at the company is now “99% dedicated” to digital currencies. He revealed that he was first introduced to bitcoin by Xapo CEO Wences Casares in early 2013, and his interest has grown steadily since.
“For me it was a life-changing experience. Coming from the online world and the payments background, I saw the future of payments, particularly because of the situation in Latin America. With the volatility of currencies, erratic economic and financial policies and corrupt politicians, it made a lot of sense.”
While introduced to digital currency through bitcoin, Bzurovski indicated that Ripple’s solution may be more uniquely tailored to the needs of the Latin American market.
For example, because Ripple uses a digital currency to move fiat currencies, Bzurovski suggests that the company’s offering is easier for local regulators to comprehend:
“I think that first of all, for policymakers, it’s much more easier to understand because we are talking about a communications system and not an entirely different currency.”
Bzurovski cited current laws in Uruguay that mandate licenses for e-money and e-wallet services as a prime example. He says that while such laws don’t allow for the use of new currencies in these offerings, the Ripple network (itself not a ‘currency’) can present a legal alternative.
Bzurovski also explained that Ripple allows AstroPay to alter its services for the needs of each of the markets it serves. This is an important factor, as he notes “a Brazilian solution is not 100% portable to Argentina or Mexico”.
However, despite this extra maneuvering, Bzurovski believes there are compelling use cases for the technology, ones that can be underscored by examples of how the current money transmission system is failing local economies.
Bzurovski, for instance, noted that consumers who deposit checks in Argentina must pay a 0.6% tax of the face value of the check. The tax, he says, creates the incentive for all the stakeholders along a supply chain to simply endorse a check and use it to pay for a service rather than depositing it.
“Let’s say that I own a supermarket and I buy a lot of meat. I buy the meat from the slaughterhouse and I issue you a check for the meat that I am purchasing. If you deposit the check, you will have to pay that 0.6% – so they take it, endorse it, and pay for the cattle owner. The cattle owner endorses and pays for the grain for the cows will be fed, so everyone tries to avoid depositing the check.”
He concludes: “This can be solved without all the hassle through Ripple.”
The launch also marks Ripple’s latest expansion into developing economies following the May launch of Mexico’s first Ripple gateway.
Operated by Puebla-based digital currency exchange Bitso, the gateway is also envisioned as a solution to help ease cross-border remittances in the major North American market.