One of the world’s biggest international money transfer company, operating in 200 countries with 347,000 agent offices, is piloting XRP for “payment flows.”
The two companies will also explore MoneyGram’s integration into the Ripple network through Ripple’s API called xVia.
MoneyGram, which moved some $600 billion across the world in 2016, is to pilot the use of XRP itself for payments through xRapid, Ripple’s solution for on-demand liquidity.
“The inefficiencies of global payments don’t just affect banks, they also affect institutions like MoneyGram. Money transfer companies are incredibly important because they help people get money to their friends and loved ones,” said Brad Garlinghouse, CEO of Ripple, before adding:
“We are excited about this pilot and a long-term strategic partnership with MoneyGram. By using a digital asset like XRP that settles in three seconds or less, they can now move money as quickly as information.”
Ripple claims their average transaction time is 2-3 seconds, while for ethereum currently it is as around 15 seconds. Ripple further says their fees are a fraction of a penny, while eth’s fees have increased recently due to considerable demand.
“Every day blockchain technology is changing the norm and encouraging innovation,” Alex Holmes, Chief Executive Officer of MoneyGram, said in a statement before adding:
“Ripple is at the forefront of blockchain technology and we look forward to piloting xRapid. We’re hopeful it will increase efficiency and improve services to MoneyGram’s customers.”
Ripple has been criticized for being centralized, requiring trusted third parties that advance IOUs in a credit and debt system, mirroring the current systemic risks that led to the 2008 banking collapse.
XRP, however, has nonetheless seen a surge in popularity recently, with its market cap rising to even briefly overtake ethereum before it crashed down, now recovering somewhat.
The currency supply is highly concentrated with Ripple the company holding some 50% of it, able to sell one billion XRP a month.
But banks and other financial institutions have been testing the network to see whether it can deliver on its promises of cheaper and quicker international transactions.
With most of the testing currently at a very early pilot stage, thus it remains to be seen whether the network can indeed deliver and whether it can do so better than actual public blockchains.