Blockchain payments startup Ripple has agreed to buy a stake in money transfer giant MoneyGram announced by the companies on Monday.
Under the deal, Ripple will, according to $ 30 million, spend $ 30 million to buy shares at a price of $ 4.10. And for the next two years, MoneyGram has the opportunity to sell another $ 20 million shares to Ripple at the same price. As noted by the magazine, MoneyGram shares are trading at approx. $ 1.45 pr. Pressure time, which means that Ripple's purchase price is close to three times the current market value.
In particular, the agreement will also see MoneyGram using the digital token XRP as part of its daily operations using Ripple's xRapid transaction product. MoneyGram said it piloted the token back in January 201
MoneyGram already serves 200 countries and territories with about $ 600 billion processed in the global money transfer market. At present, the company uses traditional foreign exchange markets that require pre-financing accounts. Ripple and MoneyGram expect settlement fees to drop from $ 30 per day. Transaction to "fractions of a dime" while settlement times are expected to fall from 15-60 minutes to just a few seconds.
In a statement, MoneyGram CEO Alex Holmes said "it is crucial that we continue to improve our platform and provide the most effective solution for getting funds from point A to point B."
" Through Ripple's xRapid product, we are able to instantly settle US dollars funds to destination currencies on a 24/7 basis, which has the potential to revolutionize our operations and dramatically streamline our global liquidity management. "
Ripple CEO Brad Garlinghouse also said in a statement that the partnership will allow MoneyGram to "greatly improve its operations and allow millions of people worldwide to benefit from the improved efficiency."
"This is a huge milestone that helps Transforming cross-b order payments and I look forward to a long-term, highly strategic partnership between our companies, "he said.
Brad Garlinghouse image via Nikhilesh De for CoinDesk