MoneyGram, the world’s second largest International money transfer service provider has announced that it will adopt Ripple’s XRP token into its payments system in an effort to expand the speed and lessen the cost of cross-border payments.
We're excited to announce our new partnership with @Ripple! More about what this means here: https://t.co/y4BdbYSYdp
— MoneyGram (@MoneyGram) January 11, 2018
Money transfer companies, like MoneyGram, allow individuals to send cross-border payments to families, friends and business partners securely and productively. The present model for these payments requires that money transfer companies use pre-funded accounts across the globe in order to source liquidity. Newer blockchain technologies however have the potential to revolutionize this process and optimize capital deployment.
According to the announcement made by Ripple on Thursday, this strategic partnership will enable MoneyGram to see how blockchain innovation and XRP can enhance the productivity of its worldwide treasury operations and consumer experience. Additionally, as part of this agreement, the two organizations likewise will explore MoneyGram’s integration into Ripple’s ecosystem through xVia.
More on today's announcement here: https://t.co/qhtIlFpm4O https://t.co/MtgHdz2O36
— Ripple (@Ripple) January 11, 2018
Ripple is more attractive to MoneyGram than Bitcoin due to it’s much faster transaction speed and much cheaper transaction fees.
According to MoneyGram press release:
"XRP remains the most efficient digital asset for payments with transaction fees at just fractions of a penny, compared to bitcoin fees of about $30 per transaction."
"Similarly, the average transaction time for Bitcoin and other top digital assets ranging from 15 minutes to an hour, whereas a transaction on the ripple network takes between two to three seconds, and even faster when using the XRP tokens."
Brad Garlinghouse, chief executive officer of Ripple said;
“The payments problem doesn’t just affect banks, it also affects companies like MoneyGram, which help people get money to the ones they care about,”
He also added;
“By using a digital asset like XRP that settles in three seconds or less, our clients can move money as quickly as information.”
XRP will be integrated into MoneyGram through xRapid, Ripple’s on-demand liquidity product that provides financial institutions with real-time foreign exchange settlement.
Alex Holmes, CEO of MoneyGram said:
“Every day blockchain technology is changing the norm and encouraging innovation. Ripple is at the forefront of blockchain technology and we look forward to piloting xRapid.”
“We’re hopeful it will increase efficiency and improve services to MoneyGram’s customers.”
The news is significant for the San Francisco-based Ripple, which already boasts joint ventures with numerous financial institutions to use its enterprise blockchain network (RippleNet) but has seen few of those firms adopt the XRP currency itself. Recent adopters include American Express and Santander who use the ripple blockchain to speed up cross-border payments between the UK and the US.
Due to the lack of XRP adoption, many analysts have criticized XRP’s recent price rally, which at one point made Ripple co-founder Chris Larsen the nominal eighth-richest person in the world.
Ripple’s Garlinghouse added in a tweet perhaps directed at these critics:
“And to be clear, the MoneyGram announcement is one step in a marathon ahead to truly make XRP the global liquidity solution for payment providers and banks.”
And to be clear: @MoneyGram announcement is one step in a marathon ahead to truly make $XRP the global liquidity solution for payment providers and banks.
— Brad Garlinghouse () January 11, 2018
In a recent claim by Garlinghouse, at least three major money transfer firms will adopt XRP in 2018, of which MoneyGram is likely the first.
3 of the top 5 global money transfer companies plan to use XRP in payment flows in 2018. Even more in the pipeline. https://t.co/5JOlxe20Ur
— Ripple (@Ripple) January 5, 2018
The XRP price surged on the news, rising more than 11 percent to $2.17 during intraday trading.