Ripple to Cooperate with MoneyGram
CryptoBit News Today2 min read
Ripple and payments company MoneyGram have signed an agreement for blockchain-based solutions. This collaboration, announced Monday by both companies, involves Ripple using its xRapid product, which leverages the cryptocurrency XRP.
The aim is to improve MoneyGram's payment services around the world. By using Ripple and XRP, MoneyGram hopes to enable faster, cheaper international transactions. ## Background
Like all major international payment companies, however, MoneyGram has to wrestle with onerous fees and slow processing times.
Meanwhile, Ripple has been positioning itself as a cryptocurrency startup that wants to revolutionize cross-border payments. It has been offering banks and payment providers like MoneyGram a chance to use blockchain to help move money faster and cheaper. So far, Ripple has signed up several exchanges and is part of several bank-led blockchain networks.
This is Ripple's latest big-name partner.
To provide some background: Ripple's payment workflow uses three cryptocurrencies:
1. XRP is the token of trade, used to move cash into, out of, and between various corridors along the transnational payment journey. If it sounds complicated that's because it is, so much so that Ripple has a dedicated person whose job it is to explain how it works.
2. Ripple's XRP ledger provides a record of transactions.
3. Finally, Ripple's xRapid product links everything together, using the Ripple Liquidity API to automatically match up buyers and sellers of XRP and deliver a quick, cheap payment to the receiver.
MoneyGram says it will use the xRapid product, which it is trialing at the moment. ## Keeping it real
But while the stated goal is "a pilot project" to improve how payments work, it's worth noting that the concrete impact of this deal is still unknown. For starters, neither company has committed to a specific plan, so there's some distance between "pilot project" and implementation on a wide scale.
Second, even though there's a lot of buzz around cryptocurrency, Blockchain and related ideas, this partnership is the first time one of the crypto giants has explicitly linked up with a traditional money transfer company. So while it's a promising start, this partnership is a long way from bringing in a new era in international payments.
But that said, the very fact that two of the biggest names in the worlds of banking and cryptocurrency have linked up is a major landmark for the cryptocurrency industry, which has been building towards this moment for a long time.
