Early this week, money transmission service MoneyGram announced a strategic partnership with Ripple. The partnership, which would initially span two years, will see both companies work on developing cross-border foreign exchange and payment settlements with the use of digital assets.
Primarily, MoneyGram will employ Ripple’s xRapid payment processing platform, which helps speed up transfers and currency conversions. With this product, MoneyGram is hoping that it would be able to increase transaction settlement speeds, thereby improving efficiency and flexibility.
We all know that this is a big deal for the crypto industry, so there’s no need to argue that point out. What remains to be seen is how much of an extent this can push all parties involved.
MoneyGram Gains Blockchain Leverage
MoneyGram is one of the largest payment processors in the world, although its popularity has been stifled by the prominence of industry giants like PayPal and the emergence of newer entrants like Stripe and Square. By adding this form of support for crypto, MoneyGram hopes to reduce the cost of sending payments across the world.
MoneyGram is not going full throttle yet into the world of bitcoin trading or cryptocurrencies. The financial giant won’t be using xRapid as a payment option. The platform would be used to enhance its cross-border speed and functionality. Success with this would see MoneyGram’s business grow beyond its current $81 million market cap.
Could this be Ripple’s big break?
Then, there’s the benefit for Ripple itself. The company has had its growth stunted for a while, as it’s struggled to get the big-name partner that it needs to launch a credible competition to SWIFT. It has chosen to work primarily with banks up till now, but most of its partners are- frankly- not as popular as MoneyGram.
For years now, people have complained about SWIFT and its challenges with transaction processing speed, opacity, and exorbitant fees. As things stand, transactions on the network could take days to be completed, and in a world where transactions require fast-paced, faster transactions, this is frankly not good enough.
This is what Ripple has looked to correct, reportedly claiming that an average transaction on its network could be completed within three seconds.
Still, its lack of a big-name partner has stifled it up to this point. With MoneyGram, the company now has the chance to show the world what its liquid processing platforms can do, and success with this would surely be the breakthrough point.
For one thing, the partnership has done well for its XRP cryptocurrency, as the asset has been on an uptrend since the partnership was announced. It could also serve as leverage for Ripple to push xCurrent, its inter-bank payment processor. Large banks have long been searching for means to enhance cross-border and inter-organization transactions; it’s the same reason why JPMorgan launched the JPMCoin. Success with MoneyGram and xRapid could spur banks’ interest in xCurrent and its potential to improve their settlement processes. For Ripple, this deal is most likely “make or break.”