Moneygram and Ripple Partner to speed up Transactions

Javier Howell
January 12, 2018

"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", Brad Garlinghouse, Ripple's CEO, said in a news release on Thursday. As part of this agreement, both companies will also explore MoneyGram's integration into Ripple's ecosystem through xVia.

XRP is one of the most efficient digital assets for payments, with its transaction fees at just fractions of a penny, which compares to bitcoin fees of about $30 per transaction.

To put things into perspective, MoneyGram transfered over $600 Billion in cross-border payments in 2016. "Similarly, the average transaction time for XRP is 2-3 seconds with other top digital assets ranging from 15 minutes to an hour", the companies said in a statement.

There are miles to go before a cryptocurrency-based system replaces correspondent banking, but MoneyGram's pilot looks like a step toward a world of faster, simpler, cheaper worldwide payments. The current model for these payments requires money transfer companies to use pre-funded accounts across the globe to source liquidity.

Much of the interest in the coin appears to be based on assumptions that XRP may ultimately come to function as a reserve currency for banks who use Ripple's technology to conduct real-time funds transfers. The two agreed upon expanding their digital payment methods globally, but the US had blocked it, sending Moneygram shares down over 9 percent. "We're hopeful it will increase efficiency and improve services to MoneyGram's customers".

Ripple is a cryptocurrency (XRP) issued by a blockchain startup of the same name and has enjoyed an astonishing rise in 2018 following in the footsteps of bitcoin. By joining Ripple's growing, global network, financial institutions can process their customers' payments anywhere in the world instantly, reliably and cost-effectively.

Global bank payments are slow and the associated fees often remain unknown until after a transaction has reached its final destination.

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