Visa have swooped to acquire British payments company Earthport for $250 million. The credit card giant, who have been reported to be preparing a blockchain-based ID service for early 2019, have paid nearly $0.40 a share to acquire Earthport. This represents more than 400% of the current share price of just under $7.50.
Earthport are a financial services firm that were founded in London over 20 years ago. Since then, they have moved into blockchain. They partnered with Ripple for the purposes of their own payment network, but also launched a single Application Programming Interface (API) in 2016, which facilitates banks connecting to the Ripple network for cross-border payment settlements. The API also offers connections to other non-Ripple-based payment methods in some 200 countries.
The news will not necessarily come as a surprise to those affiliated with Earthport, as the firm’s share price has dropped by nearly 30 per cent this year, with the firm citing losses and expenses as a reason to employ a strategic shift. This shift has now come in the form of a buyout, which will provide a nice payday for investors.
This latest buyout sees Visa move closer to Ripple, and Ripple CEO Brad Garlinghouse is quick to point out the growing number of SWIFT firms that are now using Ripple. He has already made comments suggesting that Ripple’s aim is to replace, or “take over” SWIFT. He also said, “SWIFT said not that long ago they didn’t see blockchain as a solution to correspondent banking. We’ve got well over 100 of their customers saying they disagree.”
And now, as Garlinghouse predicts that XRP could surpass Bitcoin, he has also been quoted in CCN as saying, “It’s very clear XRP is not a security…If Ripple the company shut down, XRP trades on a hundred other exchanges around the world and XRP would continue to trade. Ripple is one important participant in the XRP ecosystem, but there are a whole bunch of participants.”
This latest news comes hot on the heels of a new banking partnership, between the National Bank of Kuwait and Ripple. Indeed, as Ripple’s network grows, it lends more credence to Garlinghouse’s comments. And with Visa seemingly starting to align themselves with Ripple pending their launch in 2019, the future of XRP – now the second largest cryptocurrency by market capitalisation, just ahead of Ethereum – looks very bright indeed.
Meanwhile, Visa B2B connect can be expected any time between January and March 2019. Kevin Phalen, Visa’s global head at Visa Business Solutions, said of the system: “B2B Connect’s digital identity greatly reduces the opportunity for fraud that might otherwise exist with checks, ACH and wire transfers today, while also helping companies remain compliant as part of the regulated financial ecosystem.”
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