MoneyGram will access and use XRP in their payment flows through xRapid, Ripple's on-demand liquidity product. xRapid enables real-time foreign exchange (FX) settlement through XRP, which gives financial institutions the ability to unlock liquidity and access multiple corridors with one pre-funded originating account. As part of the agreement, MoneyGram will pilot XRP in their payment flows and also explore integration into Ripple's ecosystem through xVia.
The money transfer company clearly sees a lot of value in XRP and its efficient clearance times. The firm also boasts average transaction times for XRP of two to three seconds.
"We are excited about this pilot and a long-term strategic partnership with MoneyGram".
"The inefficiencies of global payments don't just affect banks, they also affect institutions like MoneyGram".
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.
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Alex Holmes, CEO of MoneyGram said: "Every day blockchain technology is changing the norm and encouraging innovation".
Ripple provides one frictionless experience to send money globally using the power of blockchain. Dragging it down were concerns that it was overbought and criticism of Ripple's centralized business model, which stands in stark contrast to the decentralization that is key to bitcoin, Ethereum and many other digital currencies.
"The Japan Bank Consortium's pilot with Woori Bank and Shinhan Bank brings us closer to sending money in an important corridor", said Emi Yoshikawa, director of partnerships at Ripple. The two agreed upon expanding their digital payment methods globally, but the USA had blocked it, sending Moneygram shares down over 9 percent.
According to a press release, MoneyGram will test Ripple's xRapid service due to its claimed speed and cost efficiency.
Global bank payments are slow and the associated fees often remain unknown until after a transaction has reached its final destination.