Moneygram, one of the world’s largest money transfer companies has been known to be working with Ripple for some time now. Back in January 2018 it was announced that:

To allow their customers to send and complete cross-border payments quicker and cheaper, MoneyGram — one of the world’s largest money transfer companies — will use XRP in their payment flows.

The use of XRP allows MoneyGram to solve the age-old liquidity issue most financial institutions face while saving time and money. Additionally, customers will have the ability to send funds real time, with transparency and certainty.

Alex Holmes, chief executive officer of MoneyGram, did mention however that Moneygram was piloting xRapid.

Since January 2018 little news followed regarding the Moneygram xRapid/XRP pilot. Until today, 18 months later.

Both Ripple and Moneygram official twitter accounts shared the news of a strategic partnership between them.

According to an announcement on Cision Pr Newswire:

Through this partnership, which will have an initial term of two years, Ripple will become MoneyGram’s key partner for cross-border settlement using digital assets. As part of this partnership, Ripple has made an initial investment of $30 million in MoneyGram equity, made up of common stock and a warrant to purchase common stock. Ripple purchased the newly-issued common stock (including the shares underlying the warrant) from MoneyGram at $4.10 per share, which represents a significant premium to MoneyGram’s current market price. In addition, at MoneyGram’s election, Ripple may fund additional purchases of common stock or warrants up to $20 million at a minimum price of $4.10 per share.

Ripple’s announcement adds that:

The partnership with Ripple will focus on the xRapid product, a solution for on-demand liquidity, which reduces reliance on pre-funding by enabling money to be sent from one currency and instantly settled in the destination currency. It leverages XRP, the native digital asset of the XRP Ledger, as a real-time bridge between the sending and receiving currencies. XRP remains the most efficient digital asset for settlement with transaction fees at just fractions of a penny, compared to other digital asset fees of about $30 per transaction. Similarly, the average transaction time for XRP is two to three seconds with other top digital assets ranging from 15 minutes to an hour.
MoneyGram operates globally in the $600 billion global remittance market, serving millions of customers in more than 200 countries and territories, supporting multiple currencies. Today, MoneyGram relies on traditional foreign exchange markets to meet its settlement obligations, which require advance purchases of most currencies. Through this strategic partnership, MoneyGram will be able to settle key currencies and match the timing of funding with its settlement requirements reducing costs, improving its balance sheet efficiency and reducing risk.

This comes 18 months after the U.S. government barred China-based Ant Financial from acquiring Moneygram. Under the terms of the deal, Ripple will pay $4.10 cents a share to acquire an 8% to 10% stake in MoneyGram. Ripple will not immediately receive a seat on MoneyGram’s board, but will instead have observer status.

Moneygram will now move from piloting XRP to using it. This is exciting news, not only for Ripple, Moneygram and XRP but the crypto space in general and a great opportunity for Ripple to push XRP utility.

Moneygram’s shares closed on Monday at $1.45, but exploded higher after the announcement, recently reaching $3 in after-hours trading.

XRP has also increased by more than 6%.