Blockchain technology is causing massive disruptions across a wide range of industries, markets, and economies. Bitcoin, the most popular blockchain application has shown the world first-hand how the decentralized nature of blockchain could cause a paradigm shift in the global economic landscape. Beyond Bitcoin, other cryptocurrencies have sprung up to solve some of the biggest business and financial problems ailing the global economy.
Ripple is one of such blockchain applications – Ripple (XRP) is a real-time payment settlement system built on blockchain technology to solve the settlement problems associated with the SWIFT network that banks currently use. Ripple prides itself in connecting “banks, payment providers, digital asset exchanges and corporates via RippleNet to provide one frictionless experience to send money globally.”
Moneygram Adopts Blockchain to Fix Payment Inefficiencies
Earlier in January 2018, news broke that Ripple and money transfer giant MoneyGram have entered a partnership to pilot the use of Ripple’s XRP in Moneygram’s payment flows in order to unlock on-demand liquidity. Both companies will also explore the possibility of integration of MoneyGram and Ripple’s ecosystems using xVia.
MoneyGram is one of the big name companies that facilitate the transfer of cross-border payments and remittances between business partners, friends, and family members. When you use MoneyGram’s money transfer service to make a remittance, MoneyGram won’t necessarily put your money on an airplane for onward transmission to the recipient. Rather, MoneyGram, through its partner agents and banks, will use pre-funded accounts or lines of credit. Moneygram and the banks get back together to resolve and settle transactions at a later date.
The problem, however, is that the process often takes hours, days, and sometimes even weeks to complete. In addition, the participation of traditional financial institutions means that senders and receivers have to pay a premium in transaction fees if they want a quicker settlement of their remittance.
MoneyGram’s partnership with Ripple will help the world’s second oldest money transfer company eliminate some of the inefficiencies of the global payments industry from its