Observation | How did Ripple's performance with the payment giant MoneyGram 8 months after its alliance?

introduction

The blockchain project Ripple has remained highly active in recent years.

Recently, the market has disputed that its partner MoneyGram received a $ 11.3 million fee from Ripple. The media has strongly questioned the success of Ripple's partnership with MoneyGram, speculating that Ripple must actually pay for MoneyGram's use of its software.

In response, Asheesh Birla, senior vice president of Ripple products, tweeted clarification, saying that the two parties are jointly building a new infrastructure, and the cost is mainly used for a large number of market development work and network payment rewards. MoneyGram also said that Ripple's on-demand liquidity platform ODL (On-Demand Liquidity) reduced the cost of capital because of the efficiency of the product, not because they received any fees from the other party.

I have to say that the cooperation between Ripple and the international money transfer giant MoneyGram last June caused a sensation. This is a large-scale test of digital currency in the cross-border payment field. In the next eight months, MoneyGram continued to expand its use of Ripple and XRP, and MoneyGram itself further relied on new digital currency businesses.

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Chives will focus on how to cooperate with Ripple and MoneyGram in the past 8 months to promote the implementation and application of its digital currency in the cross-border payment field.

At the beginning of the alliance: the first attempt to apply large-scale crypto assets to cross-border payments

On June 17, last year, before the launch of Facebook's Libra, cryptocurrency company Ripple announced an important partnership with the international money transfer company MoneyGram, which will use XRP in its daily money transfer services. Ripple will spend $ 30 million to acquire an 8% -10% stake in MoneyGram and is expected to invest another $ 20 million in cash within 2 years.

From its inception, Ripple's vision is to build an open payment network, change the current situation of high and slow global payment costs, and rely on its payment and transaction network, RippleNet, to provide three payment solution systems for banks and financial institutions , xRapid , XCurrent, and xVia.

The cooperation with MoneyGram is an important step for Ripple in landing applications, and Ripple has made no secret of its strong hopes for this cooperation.

In August last year, Ripple CEO Brad Garlinghouse said: "This (Ripple and MoneyGram cooperation) is a big deal, and I bet now that a year later, the cooperation with MoneyGram will have a far-reaching effect on the crypto market than the Libra white paper. Impact . " Brad believes that Ripple's cooperation with MoneyGram represents the first use case of large-scale application of crypto assets in production.

MoneyGram is an international money transfer company. Most of the company's revenue comes from money transfer services, and it competes with companies such as Western Union and PayPal for market share in the bankless transfer market.

Due to the implementation of the "digital transformation" restructuring plan in 2018, and increased competition in the industry, and high compliance costs, MoneyGram was in financial difficulties. The cooperation with Ripple aims to use RippleNet and ODL to reduce operating costs and improve operating profit margins.

xRapid is an on-demand liquidity solution that uses XRP to build a global currency bridge. Alexander Holmes, CEO of MoneyGram, is very optimistic about XRP and xRapid technologies, and believes that "XRP is definitely an asset suitable for international remittances ", and quickly stated after the cooperation that xRapid technology will be used in the company's backend in the short term to improve the speed of its platform and effectiveness.

According to Holmes, one of Ripple's xRapid's biggest advantages is the ability to move funds in real time without having to hold large amounts of cash in global bank accounts. MoneyGram's performance report document states that "Ripple will be our main partner for cross-border settlement using digital assets."

Cooperation effect: MoneyGram's cross-border payment business expansion and Ripple's global influence significantly increased

Two months after the announcement of cooperation with Ripple, that is, at the end of August, MoneyGram launched Ripple's XRP cross-border payment solution xRapid, and MoneyGram Chief Financial Officer Larry Angelilli said that xRapid is expected to begin to affect the fourth quarter of this year (2019) MoneyGram's profits suggest that the technology is considered a core part of its business.

In January this year, a report confirmed that MoneyGram achieved breakthrough online transaction growth during the Christmas period. During the period from December 1 to December 25, the transaction volume of the MoneyGram online platform soared sharply, a year-on-year increase of 70%, of which 80% of transactions were completed through mobile devices.

The report shows that MoneyGram's major online market transactions have grown by almost 100%. MoneyGram revealed that approximately 3.2 billion smartphone users and changing customer behavior are calling for transformation, such as investing in its digital businesses and key international markets.

MoneyGram CEO Alex Holmes said, "As part of the digital transformation, our mission is to mobilize the flow of money. The success of our mobile applications throughout the year, especially this holiday season, proves that consumers value not only the user experience, We also value our global distribution network. "

And the adoption of MoneyGram will undoubtedly bring breakthrough progress to the application of Ripple, promote the application of Ripple technology and XRP digital currency, and enhance the company's global influence, mainly in the following three aspects.

XRP 's actual transaction volume has grown significantly

As the second largest remittance service company in the world, MoneyGram has a wide range of transaction businesses around the world. Its adoption of XRP has also directly promoted the growth of XRP's actual transaction volume.

On August 3, 2019, Moneygram officially announced the launch of integration with Ripple's cross-border payment platform xRapid and confirmed that the technology can complete payments in seconds.

In the following week, Asheesh Birla, senior vice president of Ripple, stated that xRapid's traffic had increased significantly due to the increase in users.

With MoneyGram's assist, Ripple CEO Brad Garlinghouse has great confidence in the subsequent marketing of XRP. Garlinghouse estimates that 100 new contracts will be signed in the next five months of 2019, and "20% will involve XRP and its xRapid product". Garlinghouse said that even banks that previously refused to use XRP are using the technology and are now willing to discuss the issue "because they see the value of XRP."

At the end of August last year, Ripple global institutional market executive Breanne M. Madigan tweeted that the actual use cases of Ripple technology are driving the actual growth of XRP transaction volume, just when MoneyGram began to apply Ripple's xRapid technology in Mexico, the Mexican cryptocurrency XRP / MXN trading volume on the exchange Bitso surged by more than 25%. In addition, according to the news from The Daily Hodl on September 13, last year, the trading volume of the XRP / Mexican Peso trading pair has exceeded the trading volume of the BTC / Mexican Peso trading pair on Bitso, and Bitso is one of the few companies that has signed agreements with financial institutions, One of the exchanges that executes transactions through xRapid.

MoneyGram CEO Alexander Holmes publicly stated at the end of last year that MoneyGram had sent a total of $ 100 million in transactions via Ripple's XRP-based payment solution ODL.

Ripple CEO Brad Garlinghouse also came forward in an interview to confirm the market's speculation that MoneyGram directly led to increased XRP sales in Mexico. Garlinghouse said that MoneyGram and other Ripple customers used XRP as a bridge to send money to Mexico, thereby increasing XRP transaction volume by 50%.

Accelerating the application of XRP in the global cross-border payment field

On November 25 last year, Ripple announced that it provided a new investment of US $ 20 million for MoneGram, and completed a total of US $ 50 million in investment to control 9.95% of MoneyGram's issued common stock. XRP cryptocurrencies are traded with the help of Ripple's on-demand liquidity.

Ripple CEO Brad Garlinghouse said that digital assets and blockchain technology could have a huge impact on cross-border payments. "Last month, we announced that MoneyGram began to use on-demand liquidity to make payments to the Philippines, and we are happy to support the further expansion of MoneyGram To Europe and Australia. "

MoneyGram and CEO Alex Holmes also said, "Our partnership with Ripple is transformative for both the traditional remittance and digital asset industries. For the first time in history, we have settled our currency in seconds. The initial success encouraged us. Speed ​​up the use of on-demand liquidity. "

Since the second half of last year, MoneyGram has accelerated the expansion of its global payment business, and these moves have directly promoted the application of XRP worldwide.

In February this year, according to Ginger Baker, senior director of Ripple products, MoneyGram now has five channels using Ripple's cross-border payment solution ODL, and 10% of its largest channel US-Mexico channel (remittance) is moving to XRP and ODL, based on XRP ODL is currently used in conjunction with the US Dollar, Euro, Mexican Peso, Philippine Peso and Australian Dollar.

MoneyGram has made great efforts in the expansion of its international payment business in the past six months.

At the end of July last year, MoneyGram announced that it has completed the establishment of a partnership with another South Korean-based remittance company Sentbe. Sentbe will act as a virtual agent for MoneyGram and will jointly provide users with a series of digital remittance options. The Korean won deal, Yogesh Sangle, head of MoneyGram's Asia-Pacific and South Asia region, said that this is a strategic move that will accelerate MoneyGram's digital transformation in South Korea.

At the end of October last year, Ripple CEO Brad Garlinghouse revealed that MoneyGram is rapidly expanding the use of XRP in its cross-border payments. The MoneyGram CEO wants to know how quickly Ripple can expand its payment product ODL to the new payment corridor, saying They will not launch a new payment corridor until they have determined that regulators and market operators have fully stepped in.

• Just after Ripple announced the completion of a new $ 20 million capital injection in MoneyGram in November, MoneyGram announced that it would increase its remittance business in Pakistan, and Pakistani Prime Minister Imran Khan also stated that the government will provide necessary assistance for MoneyGram's expansion and will assist Foreign citizens send money to the country.
• Then on December 5, MoneyGram announced that it would expand its debit card deposit service to Spain and the Philippines.
• In January this year, MoneyGram entered the Indian market and then the Egyptian market. After cooperating with Indian company EbixCash, MoneyGram can access EbixCash's 320,000 distribution outlets in India, and its remittance payment service has been greatly expanded; and after the strategic cooperation between MoneyGram and Egypt's Suez Canal Bank, MoneyGram worldwide can also directly Deposit into a bank account in Egypt.
• In February this year, Moneygram quickly entered the Singapore market, announcing the opening of a website for Singapore customers, allowing Singapore users to use MoneyGram's digital services for cross-border payments.
• In addition, MoneyGram also launched the MoneyGram FastSend service at the end of February. The service can send money by entering a phone number. The sender only needs to enter the payee's name and phone number, and the money will be quickly deposited into the payee's bank account. . It is reported that FastSend can currently run between users in the United States, and can also send money from the United States to Spain.

At the Ripple webinar on February 8 this year, Asheesh Birla, senior vice president of product management at Ripple, spoke about the progress that Ripple and its corporate partners are making.

Birla pointed out that "Bitso transferred 18 million US dollars in remittances through XRP in the last few weeks of December, and this number is growing at a rate of 15% -20% every week." "Suihuijin now has five channels using ODL . Its 10% of the largest US-Mexico channel (remittance) is moving to XRP and ODL. "

In addition, according to u.today, as of December 2, 2019, 24 companies have relied on Ripple's ODL solution for cross-border payments. These companies include FlashFX, goLance, Viamericas, and large money transfer company MoneyGram.

Promote the optimization and upgrade of the XRP landing scheme

Although with the rise of distributed ledger technology in recent years, many digital currencies have begun to try to enter the field of cross-border payments and remittances, but until today, digital currencies have not convinced most people.

The cooperation between Ripple and MoneyGram in related businesses is more important in the continuous polishing and optimization of Ripple-related technologies and product solutions.

In an interview with First Move magazine late last year, Alexander Holmes, CEO of MoneyGram, also said that Ripple's early experience in blockchain and cryptocurrencies convinced him that this technology could change the cross-border payment industry, but "There are still some questions about the value and future of cryptocurrencies in this field."

Holmes said that the company is working to optimize and improve the use of XRP as a cross-border transfer engine. "At present MoneyGram is using XRP as a medium of exchange from US dollars to pesos. XRP is between the two parties. If all of this becomes a long-term investment, it is very valuable. interesting."

When the ODL scheme was adopted, Holmes mentioned that the cooperation between the two parties was to use each other's selling points to make up for their shortcomings.

Holmes believes that Ripple has large-scale blockchain technology, and its XRP can achieve cross-country transfers in seconds, but what they lack is a global liquidity pool denominated in fiat currencies, and MoneyGram has funding pools around the world. But MoneyGram's speed can only be achieved through the ability to advance financing and transfer funds in advance.

One system is fast but lacks liquidity, while the other system has a lot of liquidity but is slow in nature.

summary

Economic globalization has accelerated the flow of global capital, promoted the expansion of cross-border payment services, and people's demand for cross-border payments and international remittances has also gradually increased.

However, the underlying system of traditional cross-border payment platforms is decentralized and complex, the service process is costly, time-consuming, tedious, and has many restrictions. The advent of blockchain and digital currencies has made more people see the possibility of transforming the cross-border payment field Sex.

At present, many countries, banking institutions and fintech companies are studying and promoting the application of digital currency in cross-transfer. Ripple is a pioneer in this field and a leader in landing applications. Its cross-border payment solution With the help of MoneyGram, it was promoted and implemented, which provided very good practical experience for subsequent optimization and development.

In addition to MoneyGram, since July last year, Ripple has cooperated with remittance companies such as Chile's Currency Bird and US Intermex to continuously increase new payment routes, promote the promotion of its payment solutions, and provide cross-border for more banks and financial institutions Payment services and the expansion of these businesses have made Ripple's global influence and business strength continue to increase.

According to the "Forbes" list of "Top 10 Fintech Companies in the United States in 2020", Ripple ranks second only to the $ 35 billion payment processing giant Stripe.

At the end of February this year, MoneyGram CEO Alex Holmes said in an earnings call that he was planning to initiate XRP transfers in other channels and use RippleNet for account-to-account transfers.

Perhaps in 2020, we will see Ripple bring more surprises to the cross-border payment field.

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