- The Californian start-up Ripple behind a Blockchain-based real-time payment protocol announces a 2-year strategic partnership with transfer company MoneyGram.
- Ripple just invested $30 million to acquire an 8 to 10% share in MoneyGram. Additionally $20 million could be paid over the next 2 years. MoneyGram will relying more on Ripple’s XRP currency.
- Goals: enable MoneyGram to process money transfers faster and help Ripple’s currency gain momentum.
- How it should work
- MoneyGram would rely on the Ripple’s payment protocol and its XRP cryptocurrency
- The company will then be able to instantly settle USD payments to other currencies 24/7j
- They could cut down operating costs, and increase their profit.
- The addition of xRapid technology on MoneyGram could be fully transparent. MoneyGram’s customers should keep sending regular currencies to each other.
- Faster digital transformation. Challenged by start-ups whose solutions are less expensive (TransferWise, for instance), long-standing money transfer companies, including MoneyGram and Western Union, have to achieve digital transformation faster. This partnership s a key step in revolutionising cross-border payments.
- Reaching far. Ripple claims over 200 financial institutions using or testing their network. This partnership is a means for them to strengthen their position on the market for money transfer and expand its reach. The price of Ripple’s XRP also witnessed a strong increase in the wake of this partnership.
- Ripple becomes one of MoneyGram’s main shareholders. It should be reminded that MoneyGram was almost bought out by Alibaba in 2017, before US competition authorities rejected the idea.
- This announcement is in line with a previous agreement from January 2018 between these companies. MoneyGram’s rival, Western Union, also started testing xRapid before reporting the amounts saved through using this solution were low. In June, a partnership with Visa was announced on addressing real-time payments.
- Ripple also faces competition from SWIFT, which has been looking further into Blockchain technologies. And they could be challenged by Facebook’s upcoming cryptocurrency Libra.