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MoneyGram Receives $11 Million Cash Injection from Ripple



MoneyGram (NASDAQ:MGI) has received over US$11 million in the last six months from Ripple in what was described as “Ripple market development fees.”

A partnership between the money remittance company and the crypto services firm was first announced back in June when Ripple agreed to provide MoneyGram with US$50 million in order to support its payments product, On-Demand Liquidity, or xRapid, as it is sometimes referred to as.

The US$11.3 million sent MoneyGram’s way over the last months is broken up into two quarters, US$2.4 million in Q3 and an additional US$8.9 million in Q4. The Q4 payment, described as a “financial benefit” by MoneyGram, was not included in its most recent earnings report. Instead, it was accounted for as a contra expense in its operating expenses, which required the company to restate its revenue down by US$2.4 million but cut operating costs by the same amount, leaving earnings unchanged.

MoneyGram had previously been filing the investments as revenue but was instructed to refile as operating expenses at the recommendation of the SEC.

“The Company is compensated by Ripple for developing and bringing liquidity to foreign exchange markets, facilitated by Ripple’s blockchain, and providing a reliable level of foreign exchange trading activity. The Company expects that this partnership, at scale, will reduce our working capital needs and generate additional earnings and cash flows,” read MoneyGram’s Q3 earnings report.

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Interestingly, the payments made to MoneyGram are actually paid out in XRP, Ripple’s native token. The crypto firm sells XRP tokens from a vast escrow account on a monthly basis, with CEO Brad Garlinghouse admitting that the company would not be where it is today without doing so. MoneyGram then sells the tokens upon receipt, which implies that the more professional users XRP attracts, the more tokens will be sold on the open market.

The agreement between MoneyGram and Ripple is slated to run until 2023.

Featured Image: DepositPhotos © nesquik007

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Ripple Finalizes $50 Million Investment in MoneyGram



Blockchain service provider Ripple Labs has finalized its $50 million investment in MoneyGram International (NASDAQ:MGI). The money transfer company received the final $20 million from the San Francisco-based firm as part of the commitment made in June 2019.

Ripple Completes Investment in MoneyGram

In June, the blockchain provider committed $30 million as part of the investment, and now it has completed the transaction. In the latest transaction, Ripple acquired MoneyGram’s newly issued stock at $4.10 per share, which is much higher than MoneyGram’s current market valuation. With the investment concluded, Ripple will now hold around 10% of MoneyGram International’s outstanding common shares.

According to MoneyGram CEO Alex Holmes, the partnership with Ripple is transformative for the digital asset segments as well as traditional money transfers. Holmes said that for the first time, they can settle currencies in a matter of seconds.

The Dallas-based money transfer firm aims at providing a platform that will enable its users across the globe to transfer and receive money quickly and safely. Customers can now transact effortlessly through the company’s mobile or online platforms, or at global agent locations. The money that MoneyGram received will go into supporting its payments product, On-Demand Liquidity, which uses XRP.

On-Demand Liquidity Enhancing the Trading Volume

Since the companies partnered in June, MoneyGram International has used the On-Demand Liquidity platform to transact around 10% of its trading volume of the Mexican peso foreign exchange. It has also expanded cross-border transfers to Australia, Europe, and the Philippines. The amount the company received from Ripple will help it enhance trading volume through the use of the XRP-powered payment platform.

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Holmes said that partnerships such as the one with Ripple drive innovations and has helped MoneyGram to create enhanced customer experiences. He added that the company expects to enhance its growth into new territories as well as trying new products and services.

Ripple CEO Brad Garlinghouse stated that he was impressed with the progress they had made since they invested in MoneyGram International. He added that blockchain tech and digital assets have significant potential for transforming cross-border transactions.

Featured image: DepositPhotos © BiancoBlue

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