Earthport is now under Visa’s control, according to an announcement issued yesterday by the payments company. Earthport has a payment network that includes banks in 87 countries in the world, and it’s one of Ripple’s strategic partners. The UK company went to Visa after a bidding war that saw the new owner fight it out with Mastercard, its traditional competitor. Mastercard dropped the bid so it could acquire another company instead, Transfast.
The final tag was of GBP 247 Million (USD 321 million), which is almost five times higher than the preliminary bid. That’s rare in itself, and it signals how intense Visa’s interest was.
Ripple is not the only high profile partner the company has. Bank of America, Merril Lynch, TransferWise, BNP Paribas, and Xoom are among them. This company powered the Banco Santander’s application that runs on Ripple’s technology and allows to send money across borders in a handful of countries in Western Europe. But Visa’s primary interest is in those 87 banks that already have a working relationship with its new company.
Why the merger
Visa plans to use the network as a starting point to come up with an international payments service that can rival SWIFT. The wire transfer market is worth USD 80 trillion yearly, so it’s a massive opportunity for all those who have an option to join. The company said that,
“Currently, Visa enables payments to be sent to or from Visa cards. The acquisition will make it possible for Visa clients to enable individuals, businesses and governments to utilize Visa to send and/or receive money through bank accounts around the world.”
Other use cases highlighted by the company included payrolls, international person-to-person transfers, business-to-business payments. Visa is working on the B2B Connect blockchain to achieve that.
“Visa is modernizing the way we move money by making it quicker, safer and easier to pay and be paid than ever before,” said Bill Sheley, head of global push payments, Visa.
“The acquisition of Earthport unleashes the power of Visa by taking us ‘beyond the card,’ empowering us to enable our clients to make payments through bank accounts around the world.”
After Visa was able to win the bidding war with Mastercard, roughly a month ago, the United Kingdom’s Competition and Market Authority (CME) launched an investigation to ensure that everything was kosher with the merger. Today, CMA announced that this merger doesn’t merit an investigation.
It seems that Ripple is getting more competition all the time to take on SWIFT’s monopoly on international transfers. First, it was Stellar Lumens (along with IBM) trying to disrupt the same market. Then R3 also became part of the mix, and it seems that now Visa wants a piece of the action.
Ripple has a considerable advantage over all the other players. Stellar has IBM’s support which could end up being very important. And Visa is already doing business everywhere in the world. So the competition will be exciting to see, and it will probably show the world why there are some use cases in which you just can’t beat a blockchain.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.