Loading
Powered Byndax
dotted

Blockchain Payments Company Ripple Announces Strategic Partnership with MoneyGram

Aug 12, 2019
undefined
byOmar Abbas

Ripple announced in a press release on Monday that the company that it has entered into a strategic partnership with MoneyGram International (NASDAQ: MGI), one of the world’s largest currency remittance companies, enabling the money transfer giant to utilize Ripple’s xRapid product. Ripple has made an initial investment into MoneyGram of US$30 million, made of up common stock as well as stock warrants of up to an additional US$20 million over the next two years at a price of US$4.10/share.

The partnership with Ripple is focused on xRapid, the company’s solution for on-demand liquidity, enabling funds to be sent in one fiat currency and settled in real-time in the destination country’s currency. The xRapid product leverages XRP, the company’s proprietary digital asset, as the bridge between sending and receiving fiat currency.

Ripple’s process of moving fiat currency over the blockchain is very simple: buy XRP with fiat at one end of the transaction and selling back into fiat at the other end in real-time. The xRapid technology opens several new opportunities for MoneyGram, including:

  • Real-Time Settlement: International wire payments are traditionally done on the SWIFT network and could take days to settle, given the number of intermediaries required to complete the transaction. Utilizing Ripple’s blockchain technology allows for cross-border and overseas payments to be settled in real-time.
  • Easily Emerging Markets: Allows the company to send and receive funds with countries that are otherwise illiquid or “under-banked” – allowing for a frictionless money remittance service with exotic currencies and remote regions.
  • Minimal Fees: MoneyGram’s settlement fees for making international fund transfers could reduce costs from approximately US$30 per wire transaction to pennies on the dollar, ultimately making for a faster, cheaper and more efficient way to send money anywhere in the world.

Ripple’s CEO Brad Garlinghouse said in the company’s press release: “This strategic partnership will enable MoneyGram to greatly improve its operations and enable millions of people around the world to benefit from its improved efficiency.”

MoneyGram supports several different currencies and serves several millions of clients in over 200 countries, relying on traditional FX remittance services to settle transactions. The newly formed partnership with Ripple allows MoneyGram to settle any currency in real-time, reduce working capital and overall costs while improving free cash flow.

“As the payments industry evolves, we are focused on continuing to improve our platform and utilizing the best technology as part of our overall settlement process,” said Alex Holmes, MoneyGram’s Chairman and CEO. “Through our partnership with Ripple, we will also have the opportunity to further enhance our operations and streamline our global liquidity management.”

keyboard_arrow_up