Jun 18, 2019 15:37 UTC
Jun 18, 2019 at 16:41 UTC
MoneyGram To Use xRapid After Collaboration With Ripple
According to recently published news, Californian FinTech company Ripple will be collaborating with MoneyGram, one of the world’s largest money transfer companies. This means that MoneyGram will now be using Ripple’s xRapid product as part of its “cross-border payment process.”
As per their agreement, Ripple by acquiring shares at $4.10 per share, which is roughly three times the market value, will be making an initial investment of $30 million in MoneyGram by acquiring shares at a price of (or approximately three times the market value). During the next two years, MoneyGram has the option to make Ripple invest another $20 million (again, paying $4.10 per share).
As had already been announced earlier, MoneyGram was testing xRapid as early as January 2018 so that it could understand how it could XRP in its payment flows for enabling on-demand liquidity for global payments.
This will be by far the largest ever real-world use of xRapid in production. xRapid uses XRP, which is the “native digital asset of the XRP Ledger”, as a “real-time bridge between the sending and receiving currencies.”
According to the blog post published by Ripple, Alex Holmes, the Chairman and CEO of MoneyGram, said:
“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. 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 revolutionize our operations and dramatically streamline our global liquidity management.”
Currently, MoneyGram is using foreign exchange markets to handle the settlement, which means that it needs to buy most currencies in advance. As a result of this partnership, MoneyGram should be able to “settle key currencies and match the timing of funding with its settlement requirements reducing costs, improving its balance sheet efficiency and reducing risk.”
Brad Garlinghouse, the CEO of Ripple, said:
“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. This is a huge milestone in helping to transform cross-border payments and I look forward to a long-term, very strategic partnership between our companies… This will eliminate the need to deploy foreign bank accounts. That’s why MoneyGram has negative working capital. It will help customers and also smooth out their treasury operations.”