MoneyGram has confirmed the completion of Ripple’s $50 million investment to the company.
According to the money transmission firm’s recent press release, Ripple Labs Inc. has released $20 million as its final equity investment to the company. The blockchain-based payments enterprise originally committed to sink $50 million in MoneyGram.
Ripple and MoneyGram signed a two-year deal back in June that would see the two companies collaborating on foreign exchange settlements using digital assets and cross-border payments. The agreement also called for Ripple to invest up to $50 million dollars on MoneyGram.
On-Demand Liquidity Solution
The infusion of funds is set to go into supporting MoneyGram’s operations as it continues to boost volumes and increase its utilization of Ripple’s On-Demand Liquidity (ODL) solution.
The US-based company’s use of Ripple’s xRapid solution will allow for payments or money transfers to be sent in one currency and instantly converted to the destination’s local currency. And by using XRP coins for transfers, xRapid will be able to conduct transactions faster and cheaper than when using fiat or other prime digital assets.
Alex Holmes, the Chairman and CEO of MoneyGram, lauded its collaboration with Ripple and called it “transformative” as it lets the company settle currencies in a matter of seconds. He added that their initial success with ODL has encouraged them to expedite their expansion.
MoneyGram recently confirmed that about 10 percent of its Mexican Peso remittances is moved using Ripple’s ODL.
Holmes also said partnerships with firms that support innovation, like the way Ripple does, allows them to focus on developing better experiences for their customers. He said he is anticipating pushing the company towards new channels and exploring new services and products.
MoneyGram is currently transacting in several new cross-border channels, including Australia, Europe, and the Philippines. The new corridors have been active since its partnership with Ripple commenced in June.
Brad Garlinghouse on the Topic
Brad Garlinghouse, Ripple Labs’ CEO, noted that they had announced last month MoneyGram’s plan to use On-Demand Liquidity to process payments to the Philippines. He also said they were excited to support the company’s expansion into Australia and Europe.
Garlinghouse added that blockchain and digital assets have the capacity to have a massive influence on cross-border payments. The CEO also underlined how Ripple and MoneyGram are a prime example of that potential. He said it was encouraging to see how the benefits and expected growth from this partnership quickly came to life.
Ripple purchased MoneyGram’s equity at $4.10 a share. It now reportedly holds 9.95% of the money transfer company’s stocks.