Shares of the money-transfer company jumped 10 percent to $13.39 at 9:37 a.m.in NY, the most intraday since March and second-best performance in the Russell 2000 Index. "By using a digital asset like XRP that settles in three seconds or less, they can now move money as quickly as information".
For MoneyGram, Fortune said, the partnership with Ripple "may provide a way to maintain its share of the money transfer market" amid competition from a new generation of low-priced Internet-based services like TransferWise. The price of XRP, which also goes by the name Ripple, has soared more than 30,000 percent over the last 12 months, rising from fractions of a penny to $2.14, according to Coinmarketcap.
Companies such as MoneyGram typically use pre-funded accounts to fulfill customers' transfers, which can tie up capital.
To execute cross-border payments today requires financial institutions to rely on a complex web of relationships with correspondent banks in other countries.
"Every day blockchain technology is changing the norm and encouraging innovation".
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Ripple's partnership with MoneyGram comes at a time when rumors of a cryptocurrency ban in South Korea have left the crypto market rattled.
MoneyGram, the world's second-largest money transfer company, stated that it was "hopeful" the partnership would "increase efficiency and improve services to MoneyGram's customers". Ripple's blockchain technology and digital currency could move money far faster, the companies said in a statement Thursday.
Ripple provides one frictionless experience to send money globally using the power of blockchain.
MoneyGram is a global provider of innovative money transfer and payment services and is recognized worldwide as a financial connection to friends and family. As Ripple's technology is based on the blockchain, the payments flow is completely transparent and the fees are lower. That makes the process for payments costly and slow.