Huge Milestone for Ripple: MoneyGram to Use XRP-Based xRapid for Cross-Border Payments - Bitcoin and Altcoins News

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June 18, 2019

Huge Milestone for Ripple: MoneyGram to Use XRP-Based xRapid for Cross-Border Payments

Californian FinTech company Ripple and MoneyGram, one of the world's largest money transfer companies, are now strategic partners, which means that MoneyGram will be using Ripple's xRapid product as part of its "cross-border payment process."

According to the terms of this deal, Ripple will make an in initial investment of $30 million in MoneyGram by acquiring shares at a price of $4.10 per share (or roughly 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 previously announced by Ripple, 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 ("a solution for on-demand liquidity, which reduces reliance on pre-funding by enabling money to be sent from one currency and instantly settled in the destination currency") 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 Ripple published yeterday, 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.”
urrently, MoneyGram is using foreign exchange markets to handle 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, had this to say:
“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."
The Ripple CEO told Fortune:
“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."
As for Larry Angelilli, the Chief Financial Officer of MoneyGram, he stated:
"We are very pleased with the terms of the Ripple investment which supports the Company with permanent capital and additional liquidity. This partnership also provides MoneyGram with the opportunity to improve operating efficiencies and increase earnings and free cash flow."

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