At first glance, it might seem that electronic money transfers are as easy and straightforward as taking care of any other type of online communications. You want to send and email, you open up your email client, type away and then send your message to your intended recipient. That’s pretty easy, right? So shouldn’t it be just as simple to send money globally? Well, it should be, but up to this point in time it has not been nearly that simple. However, with the implementation and adoption of a new global money transfer protocol, called Ripple, sending money around the world may become very simple in the very near future.briefcase-of-cash

It’s all about Protocols

Going back to our example using emails may help to clear up just how big of a deal the Ripple Protocol could prove to be. You see, you can send an email to virtually anyone with an email account thanks to an email protocol called SMTP, short for Simple Mail Transport Protocol. This protocol ensures that emails are sent, error free (for the most part) to anyone with a valid email address and the ability to open emails on a computing device. In essence, protocols are the underlying bits of technology that make online communications possible.

The Ripple Transaction Protocol

Now that you understand how protocols drive electronic communications, let’s talk about Ripple. The official name of the protocol is the Ripple Transaction Protocol, or RTXP for short. This money transfer protocol is an internet protocol, just like HTTP, SMTP, FTP or any other type of protocol that drives successful online communications, transfers or transactions. But we all know that sending a file across the internet is a lot different than sending money across international borders, so the question remains of how the big banks around the world will implement RTXP to allow for seamless online money transfers from one country to another.

The CEO of Ripple Labs, Chris Larsen recently went on record saying, “We’ve been working on our enterprise banking strategy for well over a year. It takes awhile for banks to get going.”

The banks around the world can already communicate online via existing, proprietary networks. While these networks have allowed limited communications and transfers, the fact that these networks are not open source has prevented global money transfers from taking off like wildfire. With the introduction of an industry wide, and bank accepted protocol, like Ripple, it will finally be simple to send money from one country to another.

It appears that U.S. banks, known for some of the strictest compliance processes in the world, are finally jumping on board and looking to find ways to implement Ripple to ease the pains and potential hazards of allowing consumers to easily send money online to overseas recipients.
The Ripple Protocol is coming to a Bank near You in the Near Future

The fact that Ripple allows currency to move between Euros and dollars without touching any cryptocurrencies, along with the recipients at both ends of the transaction being licensed banks helps to put fears of adopting this new technology to rest. Several large banks in the United States are already on board to test and implement Ripple, so you should not be surprised to find that sending money to your overseas family members, friends or business partners is about to become easier than it has ever been before. It may be a while before all of the major U.S. lenders adopt Ripple, but the future looks very bright for online money transfers at last!

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