Ripple has always been proactive when it comes to expanding the business and forging new ties. Keeping in line with that policy, Ripple has agreed to invest up to $50 million in MoneyGram, for a two-year partnership between the two companies.
The motive behind this partnership is to allow MoneyGram access to Ripple’s digital currency XRP for cross-border payment and foreign exchange settlement. It is an initiative taken by MoneyGram in a bid to facilitate more efficient cross border money transactions.
Now this is a great news considering Ripple’s investment in this venture will definitely go a long way in improving MoneyGram’s credibility. To start off, Ripple is investing $30 million to buy shares and a warrant to buy common stock at $4.10 a share. Furthemore, MoneyGram has the final call on whether or not they will allow Ripple to invest another $20 million at a minimum price of $4.10 per share.
The partnership’s presently agreed upon tenure is 2 years and the companies have already created their pilot last year. Ripple’s payment network xRapid is primarily going to be the tool used by MoneyGram to transfer XRP. This adoption of Ripple’s platform will drastically cut down the time and cost that it requires to transfer money.
Once again Ripple has proved that it is the most widely sought after payments platform when it comes to digital transactions and especially cross border transactions. This is also a sign of Ripple’s growing list of clientele.
Alex Holmes, CEO, MoneyGram, says: “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.”
MoneyGram has been facing intense competition from its rivals, which is why they are taking the use of blockchain technology more seriously than ever before. Their choice to go with Ripple isn’t really surprising considering that Ripple’s cross border payments platform has been widely adopted by many banks, institutions and businesses.
I personally feel it’s a great news for both the parties involved. Ripple gets to expand its partner base while MoneyGram shall benefit immensely from this partnership, seeing that its stock price has almost doubled since this news was announced.