MoneyGram Partners With Ripple, Will Use XRP To Lower Costs

Shares of Moneygram International Inc MGI gained more than 9 percent Thursday after the money transfer company confirmed a partnership with Ripple, a blockchain company that rivals bitcoin.

The stock's move follows the likes of Western Union WU and Seagate STX, both of whom have recently been connected to XRP.

What You Need To Know

As part of the new partnership, MoneyGram will pilot the use of Ripple's digital currency, XRP, in its payment flows through xRapid, Ripple's solution for on-demand liquidity, a press release said. XRP is said to be the most efficient digital asset for payments and comes with a transaction cost of less than one penny versus bitcoin's fees of around $30 per transaction.

The average time transaction involving the XRP currency is two to three seconds, while other digital currencies require 15 minutes to one hour to complete.

Why It's Important

"The inefficiencies of global payments don't just affect banks, they also affect institutions like MoneyGram. Money transfer companies are incredibly important because they help people get money to their friends and loved ones," said Brad Garlinghouse, CEO of Ripple. "We are excited about this pilot and a long-term strategic partnership with MoneyGram. By using a digital asset like XRP that settles in three seconds or less, they can now move money as quickly as information."

What's Next?

Moneygram was rumored to be looking to adopt XRP in its platform and now that it's confirmed, the company says the strategic partnership will give an opportunity to "understand how blockchain technology and XRP can improve the efficiency of their global treasury operations and consumer experience."

Warren Buffett Has No Intention To Go Long Or Short Any Cryptocurrencies

Image Credit: Ged Carroll from Hong Kong mostly, HKSAR (MoneyGram neon sign) [CC BY 2.0], via Wikimedia Commons

Market News and Data brought to you by Benzinga APIs