MoneyGram, the second largest money transfer provider in the world, confirmed that it was going to start using Ripple’s cryptocurrency, XRP in its operations for cross-border payments in the near future.
Ripple is the world’s leading blockchain solution provider for payments. By using Ripple’s blockchain network, financial companies can process payments anywhere in the world almost instantly and cost-effectively. The fact that it is on a permanent ledger also makes the transactions more secure.
Considering the fact that MoneyGram has a presence in almost every country in the world, this is a really big break for the fledgling cryptocurrency. By using XRP, MoneyGram stands to ease out the liquidity problems that most financial companies face nowadays.
Currently, with the exception of banks, all other financial companies wrestle with high transaction fees, transfer delays as well as liquidity for its customers. The model for payments being used today requires money transfer companies to use accounts that are pre-funded to ensure that they have enough liquidity. Blockchain technology that Ripple is using can dramatically change this process and make capital deployment a lot easier.
MoneyGram will be using XRP via the xRapid project. xRapid is Ripple’s payment network. The idea is that MoneyGram will carry out its money transfers through xRapid, thereby reducing the costs that are associated with cross-border transfers. XRP is the most efficient digital currency for making payments as its transaction fees are just a few pennies compared to Bitcoin, which currently has transaction fees in the range of $30. Additionally, XRP settles money in less than 3 seconds, which makes transferring money pretty much instantaneous.
By using Ripple’s crypto, MoneyGram now stands to have better liquidity as well as having access to multiple corridors from a single originating account.
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