Payments start-up Blockchain, Ripple, has reached an agreement to acquire a stake in the money transfer giant MoneyGram, announced Monday the two companies.
According to the Wall Street Journal and Fortune, Ripple will spend $ 30 million to buy shares priced at $ 4.10 each. And over the next two years, MoneyGram will have the option of selling an additional $ 20 million of shares to Ripple at the same price. As noted in the Review, the MoneyGram shares trade at approximately $ 1.45 each at the time of publication, which means that the purchase price of Ripple is almost three times the current market value.
MoneyGram will also use the XRP token as part of its day-to-day operations using the Ripple's xRapid transactional product. MoneyGram said it was testing the token in January 2018, as reported by CoinDesk at that time.
MoneyGram already serves 200 countries and territories, with approximately $ 600 billion traded on the global remittance market. At present, the company uses traditional foreign exchange markets, which requires pre-financing accounts. Ripple and MoneyGram expect settlement fees to rise from $ 30 per transaction to "fractions of a cent," while settlement times should be reduced from 15 to 60 minutes to just a few seconds.
In a statement, MoneyGram CEO Alex Holmes said: "It is imperative to continue to improve our platform and provide the most effective solution for obtaining funds from point A to point B . "
"With Ripple's xRapid product, we will have the ability to instantly adjust funds in US dollars in destination currencies 24 hours a day, 7 days a week, which could revolutionize our operations and significantly streamline our overall cash management. "
Ripple Chief Executive Officer Brad Garlinghouse also said in a statement that this partnership would allow MoneyGram to "dramatically improve its operations and enable millions of people around the world to benefit from its increased efficiency. ".
"This is an important milestone in the transformation of cross-border payments and I hope for a very strategic long-term partnership between our companies," he said.
Image Brad Garlinghouse via Nikhilesh From for CoinDesk