MoneyGram, the world’s second-largest money transfer service, has announced that it will adopt Ripple’s XRP token in an open-ended pilot program designed to increase the efficiency of international payments.
The Dallas-based firm, second in size only to Western Union, announced on Thursday that it will pilot the use of XRP in its internal payment flows.
The partnership will see MoneyGram adopt xRapid, Ripple’s on-demand liquidity product, which uses XRP to settle cross-border payments in real time at a much lower cost than using legacy payment systems.
“The payments problem doesn’t just affect banks, it also affects companies like MoneyGram, which help people get money to the ones they care about,” said Brad Garlinghouse, CEO of Ripple. “By using a digital asset like XRP that settles in three seconds or less, our clients can move money as quickly as information.”
“Ripple is at the forefront of blockchain technology and we look forward to piloting xRapid,” said Alex Holmes, chief executive officer of MoneyGram, in a press release. “We’re hopeful it will increase efficiency and improve services to MoneyGram’s customers.”
Although a number of banks and financial institutions — including household names like American Express — have conducted blockchain trials using RippleNet, the company’s enterprise blockchain, they have shied away from integrating XRP.
Consequently, many critics had stated that the ripple price’s recent rally — which saw the value of XRP soar nearly 30,000 percent in 2017 — was unwarranted relative to actual XRP adoption.
Though perhaps not complete vindication of XRP, MoneyGram’s announcement should make at least a minor dent in that narrative, a dent that could deepen if Ripple’s recent claim that at least three major money transfer firms will adopt XRP in 2018 is borne out.
“And to be clear,” Garlinghouse added today in a tweet, the “MoneyGram announcement is one step in a marathon ahead to truly make XRP the global liquidity solution for payment providers and banks.”
Though Ripple has not confirmed it publicly, this announcement could be the first fruit from the $300 million RippleNet Accelerator Program, which the company launched last quarter to spur XRP adoption among financial institutions. Through the program, institutions can receive rebates and incentives to integrate XRP into their payment systems, making pilot program’s such as MoneyGram’s much more attractive.
The ripple price traded up on the news, briefly rising as high as $2.25 before pulling back to a present level of $2.08
Featured Image from Flickr/Mike Mozart