MoneyGram International Inc. is admittedly one of the world’s largest money transfer companies and one of the most developed payment ecosystems. It is a globally renowned platform that enables its customers to safely and affordably send money for all their needs, in now almost 200 countries and territories.
Recently, on June 17th, it announced that it will be entering into a strategic partnership with Ripple. Ripple is a leading enterprise and a provider of blockchain solutions for global and local payments all over the world. This partnership will have an initial term of two years, after which Ripple is likely to become MoneyGram’s key partner for cross-border payments and foreign exchange settlement using digital assets.
According to the Wall Street Journal and Fortune, under this deal, Ripple will fund additional purchases of common stocks and warrants up to an amount of $20 million at a minimum price of $4.10 per share, which is 3 times the current market value. This contribution will represent a significant portion of Moneygram’s existing market price.
Ripple has also agreed to render a capital investment to MoneyGram, which enables the company to draw up to $50 million in exchange for equity over a period of two years. The partnership with Ripple will focus on the xRapid product, a solution for on-demand liquidity, which reduces the customers’ reliance on pre-funding by enabling money to be sent from one currency to another destination currency almost instantly.
XRP is one of the most efficient digital assets, with an unprecedentedly low transaction time and transaction fee, and this deal shall reportedly as a real-time bridge between the sending and receiving currencies.
Alex Holmes, CEO and Chairman of MoneyGram says ‘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’.
‘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’, says Brad Garlinghouse, the CEO of Ripple.
Through this partnership, MoneyGram will also be able to settle key currencies and match the timing of funding with its settlement requirements thereby reducing costs, improving its balance sheet efficiency, and also reducing risk.