Ripple completes investment in MoneyGram, expansion of ODL expedited

Today, on November 25th 2019, Ripple has completed its investment in MoneyGram.

According to today’s announcement:

“Ripple has made the final $20 million investment in MoneyGram equity pursuant to Ripple’s original $50 million equity investment commitment made earlier this year.  Ripple purchased the newly-issued equity from MoneyGram at $4.10 per share, which represents a significant premium to MoneyGram’s current market price. This funding will support MoneyGram’s operations as the company continues to increase volume and use of On-Demand Liquidity, Ripple’s product that leverages the digital asset XRP to send money globally, instantly and reliably for fractions of a penny.

“Our partnership with Ripple is transformative for both the traditional money transfer and digital asset industry – for the first time ever, we’re settling currencies in seconds. This initial success encourages us to expedite expanding our use of On-Demand Liquidity,” said Alex Holmes, MoneyGram Chairman and CEO. “Partnerships with companies like Ripple support innovation and allow us to invest in creating better customer experiences. I anticipate furthering our growth into new corridors and exploring new products and services.”

MoneyGram is currently moving approximately 10 percent of its Mexican Peso foreign exchange trading volume through On-Demand Liquidity and has already started transacting in four additional cross-border corridors, including Europe, Australia and the Philippines since the partnership with Ripple was announced in June 2019. 

“Last month, we announced that MoneyGram began using On-Demand Liquidity for payments to the Philippines, and we’re excited to support MoneyGram’s further expansion into Europe and Australia. Digital assets and blockchain technology have the potential to make a tremendous impact on cross-border payments – MoneyGram and Ripple is an example of that,” said Brad Garlinghouse, Ripple’s CEO. “In June, we announced this partnership, and it’s encouraging to see the rapid growth and benefits come to life.”  

The strategic partnership

On June 17th 2019, a strategic partnership between the two was announced, including a $30 million equity investment by Ripple in MoneyGram and a commercial partnership leveraging blockchain-based technology. The partnership focused on the xRapid product (now known as ODL), 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. In addition, according to the announcement, Ripple had the option to fund additional purchases of common stock or warrants up to $20 million.

MoneyGram using ODL and XRP

Since then, MoneyGram has begun leveraging ODL and the digital asset XRP for its cross-border payments. Alex Holmes (the Chairman and CEO of MoneyGram) spoke about the partnership with Ripple, ODL and XRP during the presentation of MoneyGram’s second quarter results, stating that “We are literally settling currencies in seconds“.

Alex Holmes was also quite vocal about ODL at Swell, Ripple’s annual conference that took place in Singapore.