Ripple has announced a partnership with money transfer company Moneygram. Ripple will use XRP for cross-border payments, adding speed and efficiency to Moneygram’s business. Ripple Labs announced that its the exclusive digital assets partner to Moneygram for the next two years. The crypto company could invest up to $50 million into the money transfer company.
Part of the deal, according to the Wallstreet Journal, is that Ripple buys $30 million in Moneygram shares at $4.10 a piece. Moneygram has the option to sell another $20 million at the same price. However, Moneygram’s shares are currently valued $1.45, which means Ripple is buying at almost triple the actual value.
Central to the deal is a Ripple Labs service called xRapid. This product reduces the need for pre-funding by enabling money to be sent from one currency and instantly settled in the destination currency. This product use XRP as a leverage, to bridge the gap between the two currencies. Transaction fees are cents instead of tens of dollars, while transaction times are seconds instead of minutes.
Moneygram and Western Union are two of the biggest money transfer services in the world. Now that Moneygram is stepping into blockchain and cryptocurrency waters, Western Union is likely to make the step as well. In December they announced plans to add cryptocurrencies to their portfolio and use blockchain for money transfers.
Following the announcement by Moneygram and Ripple Labs, the price of XRP jumped five percent, peaking at $0.459385. Currently XRP is valued at $0.441749. That’s still above yesterday’s $0.43.
Also published on Medium.