According to Ripple Labs, a two-year partnership has been struck with MoneyGram which makes Ripple its exclusive digital assets partner. The purview of Ripple’s use case here might be more limited than expected. It depends on how many of the transactions are sent and received using Ripple’s technology and how much they’re worth.
Whatever the case, the partnership doesn’t, for example, mean that you’ll be able to buy and sell XRP at any MoneyGram location. Something along those lines would be the ultimate goal for a crypto-integration. If MoneyGram added a cryptocurrency ATM to every site it has around the world, it could create a global liquidity network for cryptocurrency. People could send and receive crypto, and MoneyGram could still play an essential part in helping people realize the funds sent and received.
In more disadvantaged areas, for example, where people didn’t even own devices to receive crypto with, they could utilize a service provided by MoneyGram, where they log into a wallet.
Whatever incumbent MoneyGram would lose in direct revenue, it could make back in ATM fees. ATM fees can range from $5 to $20, depending on the size of the transaction, or even higher. In effect, MoneyGram could end up making more money by simply adding support for crypto to most or all of its locations and helping people use it.
Ripple brags that its xRapid product will enable MoneyGram to have settlements in a matter of seconds rather than several minutes, writing:
“The partnership with Ripple will focus on the xRapid product, a solution for on-demand liquidity, which reduces reliance on pre-funding by enabling money to be sent from one currency and instantly settled in the destination currency. It leverages XRP, the native digital asset of the XRP Ledger, as a real-time bridge between the sending and receiving currencies. XRP remains the most efficient digital asset for settlement with transaction fees at just fractions of a penny, compared to other digital asset fees of about $30 per transaction. Similarly, the average transaction time for XRP is two to three seconds with other top digital assets ranging from 15 minutes to an hour.”
MoneyGram and Western Union make up a significant portion of the world’s peer-to-peer money transfers. While people have long compared their fees to the considerably lower costs on cryptocurrency, the comparisons don’t always make perfect sense.
For example, MoneyGram immediately solves any problems with local liquidity by ensuring that people get the currency local to where they are. This is possible through the massive, established network, which Ripple says it will boost with xRapid for international settlements.
MoneyGram is one of the largest, best-established money services providers in the world. They have locations everywhere you can name and have performed the functions of cryptocurrency, without the trustlessness or lack of ID, for decades.
Both MoneyGram and Western Union have been tepid in their approach to cryptocurrency integration.