Ripple (XRP) invested $9.3 million in MoneyGram in the third quarter of 2020. Ripple has been an official partner of the payment service provider since June 2019. MoneyGram considers this payment as a kind of market development fee, which is paid regularly by Ripple.
At the same time, Ripple makes it clear with the payment that the partnership is pursuing the goal of accelerating the use of XRP in the payment network. The payment service provider can look back on an extremely successful year and is one of the fastest growing providers in this sector.
Ripple Pays Millions to MoneyGram
While Ripple’s rate followed the trend of most Altcoins and recorded slight losses under the Bitcoin dominance, cooperation with the large partners seems to benefit. MoneyGram, one of Ripple’s best-known partners, has published the latest quarterly report with an agreed Ripple payment recently. As part of the partnership between the two companies, there is a place for regular payment. MoneyGram calls it the market development fee. Alex Holmes, CEO of MoneyGram, described the third quarter of 2020 as incredibly successful.
The quarterly report shows that the direct-to-consumer channel is particularly profitable. This recorded an increase of 111 percent in the transaction volume and a profit increase of 114 percent. The point is that MoneyGram made a profit of $323.2 million. In return, operating costs could be reduced by 56 percent. A look at the cross-border transactions makes it clear that MoneyGram is mainly used for worldwide payment transactions. The payment service provider recorded a growth of 176 percent in this sector.
What Is the Main Aim of Ripple?
As was mentioned before, Ripple pays a variable sum to its partner at regular intervals. For example, in the second quarter of 2020, it was $15.1 million. While in 2019, the total sum transferred was $11.3 million. Brad Garlinghouse, the CEO of Ripple, considers these payments as an optimal way to mutually benefit from the partnership. At the same time, the financial support is intended to motivate MoneyGram to use the fourth largest cryptocurrency in terms of market cap. Due to the conceptual similarity, this view makes perfect sense. Ripple makes each of these payments in XRP and MoneyGram converts the tokens immediately upon receipt.
MoneyGram shows each incoming money from Ripple separately. Accordingly, about $8.9 million, less transaction and trading costs, remained from $9.3 million transferred. Both companies are already benefiting from this partnership. Most recently, MoneyGram provided liquidity to Ripple’s on-demand liquidity network. XRP could revolutionize MoneyGram’s payment transactions in the future. As a blockchain network, Ripple could reduce currency exchange costs and increase the performance of transaction processes. It’s not clear which specific projects the two companies are currently implementing.
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