Moneygram International Inc. (NASDAQ: MGI) announced on Thursday that it will partner with XRP or Ripple to speed up monetary transaction. The two will be using blockchain technology through Ripple’s xRapid, a solution for on-demand liquidity.
Ripple was more appealing than Bitcoin to Moneygram because of Bitcoin’s fees. Ripple’s transaction fees still remain fractions of a penny, while Bitcoin fees are approximately $30 per transaction. Ripple’s transaction time is about 2-3 seconds, while bitcoin ranges anywhere from 15 minutes to an hour.
"The inefficiencies of global payments don't just affect banks, they also affect institutions like MoneyGram. Money transfer companies are incredibly important because they help people get money to their friends and loved ones," said Brad Garlinghouse, CEO of Ripple. "We are excited about this pilot and a long-term strategic partnership with MoneyGram. By using a digital asset like XRP that settles in three seconds or less, they can now move money as quickly as information."
Moneygram says this partnership will allow it to understand how blockchain technology and XRP can improve the efficiency of its global treasury operations and improve consumer experience.
Alex Holmes, Chief Executive Officer 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."
This partnership comes shortly after the U.S. had blocked Alibaba’s Ant Financial’s takeover of Moneygram. The two agreed upon expanding their digital payment methods globally, but the U.S. had blocked it, sending Moneygram shares down over 9 percent.
After Moneygram’s announcement with Ripple, shares recovered back 10 percent, opening stronger than after shares had fallen from the U.S. blocking the merger.