Shares of Moneygram International (NYSE:MGI) skyrocket after the company says it will test partnering with cryptocurrency Ripple on payments.
The trial will see MoneyGram use XRP in payment flows through Ripple's payment network xRapid in an effort to speed up and cut the cost of transferring money. XRP is an efficient digital asset for blockchain powered payments with transaction fees at just fractions of a penny.
XRP is fast too. Ripple's transaction time is about 2-3 seconds, while bitcoin ranges anywhere from 15 minutes to an hour.
Ripple's MoneyGram partnership fits in nicely with its big play to become the crypto payment solution of choice not just on the web, but also through brick-and-mortar transfer providers.
The goal of the pilot is to "move money as quickly as information", Brad Garlinghouse, CEO of Ripple, said in a statement.
Ripple, a bitcoin rival, claims it can settle digital transactions in three seconds or less, making it attractive to financial institutions. Instead, by using XRP Moneygram can directly transfer funds from one country to another instead.
"Ripple is at the forefront of blockchain technology", Alex Holmes, chief executive officer of MoneyGram, said in the statement. Money transfer companies are incredibly important because they help people get money to their friends and loved ones.
MoneyGram, like its rival Western Union has faced increasing competition from a new generation of low-priced Internet-based services like TransferWise.
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. Whether online, or through a mobile device, at a kiosk or in a local store, we connect consumers any way that is convenient for them.