MoneyGram agrees $50m partnership with Ripple
Enterprise blockchain solution provider Ripple has agreed to provide a capital commitment of up to $50 million capital to MoneyGram in exchange for equity over a two-year period, reports Jane Connolly.
The agreement will see Ripple become MoneyGram’s key strategic partner for cross-border payment and foreign exchange settlement using digital assets.
With the aim of cutting the costs and timescales associated with settlement processes using traditional foreign exchange markets, which require advance purchases of most currencies, the partnership will focus on Ripple’s on-demand liquidity product, xRapid.
xRapid utilises the cheaper and more efficient XRP, the native digital asset of the XRP Ledger, as a real-time bridge between the sending and receiving currencies. Transaction fees cost less than a penny, compared to about $30 per transaction for other digital assets, and average transaction time is reduced to two or three seconds.
“As the payments industry evolves and matures, it’s imperative that we continue to improve our platform and provide the most effective solution to get funds from point A to point B,” says MoneyGram chairman and CEO, Alex Holmes.
He adds: “Through Ripple’s xRapid product, we will have the ability to instantly settle funds from US dollars to destination currencies on a 24/7 basis, which has the potential to revolutionise our operations and dramatically streamline our global liquidity management.”
MoneyGram currently serves millions of customers in more than 200 countries and territories, as part of the $600 billion global remittance market.