On Friday (August 2), the 2019 second quarter results conference call, Alex Holmes, CEO of MoneyGram International, spoke about the company and Ripple. ) The relationship of cooperation.
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MoneyGram is one of the world's largest remittance companies and is headquartered in Dallas, Texas, USA. MoneyGram has nearly 350,000 global agencies in more than 200 jurisdictions.
MoneyGram's strategic partnership with Ripple
On June 17, MoneyGram issued a press release stating that it has signed an agreement with cross-border payment expert Ripple to allow MoneyGram to use Ripple's XRP-driven product xRapid as part of MoneyGram's “cross-border payment process”.
The announcement also mentioned:
· This partnership was initially two years;
· Ripple will become a key partner of MoneyGram's “use of digital assets for cross-border settlement”;
· Ripple “has made an initial investment of US$30 million in the equity of MoneyGram”;
· Ripple "purchased newly issued common stock (including stocks of warrants) at a price of $4.10 per share" (this price is significantly higher than the current share price of MoneyGram);
· MoneyGram has the right to reinvest Ripple for $20 million (again, $4.10 per share).
The press release also provides a good description of Money Express's motivation to upgrade cross-border payment process technology:
Today, MoneyGram relies on the traditional foreign exchange market to fulfill its settlement obligations, which requires the purchase of most currencies in advance. Through this strategic partnership, MoneyGram will be able to settle key currencies and match financing time to its settlement requirements, thereby reducing operating costs, working capital requirements, and increasing revenue and free cash flow.
This will be the biggest adoption of xRapid (an on-demand liquidity solution that allows funds to be remitted from one currency and immediately settled in the target currency, thereby reducing the reliance on pre-financing) in actual production. xRapid uses XRP as a "real-time bridge between sending and receiving currencies," and XRP is "XRP Ledger's local digital asset."
Ripple CEO Brad Garlinghouse told Fortune Magazine:
“This will eliminate the need to deploy foreign bank accounts. This is why MoneyGram's working capital is negative. It will help customers and make their financial operations smoother.”
MoneyGram uses Ripple's xRapid product and XRP cryptocurrency
On Friday, MoneyGram announced its second quarter results for 2019. In the conference call, Alex Holmes, Chairman and CEO of MoneyGram, said something interesting about Ripple, xRapid and XRP. (The Seeking Alpha website has a complete record of this earnings conference call.)
Regarding the strategic partnership with Ripple, Holmes first stated that this is one of the “three important achievements” that helped Quick Cash improve its “long-term capital structure and credit status”.
Second, he said that MoneyGram had started “trading on the Ripple xRapid platform” earlier this week. “All indications are that this is a very beneficial relationship for all parties involved.”
Even better, the Quick Cash CEO expressed his excitement about xRapid:
"We put the currency in second place. In the words of my friend Larry, this is really cool."
Finally, he said that the partnership with Ripple will help improve the MoneyGram's settlement engine, and the MoneyPlus Innovation Lab "will continue to explore new encryption, DLT and blockchain as we seek to build future business models. Exciting use cases."