Ripple and MoneyGram Get Together for Cryptocurrency Testing

MoneyGram most recently made news as being a target of Ant Financial’s Alipay operations, but after regulators put the kibosh on such an arrangement, it had to carry on as its own entity. Now, MoneyGram is branching out in an unexpected direction: cryptocurrency. It’s teamed up with one of the biggest newcomers around, Ripple, to run the digital currency through its payment flows.

The partnership arrangement calls for Ripple to serve as the medium for cross-border transactions, whether to friends and family or business partners. The current model for such cross-border payments, MoneyGram noted, requires a funded account to be in place already. With blockchain technologies in place—like those that commonly underpin cryptocurrencies—it can smooth out the process and make it simpler for all concerned.

Ripple, meanwhile, noted that its currency, commonly called XRP, boasts transaction fees that are merely fractions of a penny, while bitcoin fees run about $30 per transaction. This is actually understandable given the massive discrepancy in value between the two currencies; XRP is currently running $2.05 a coin as of this writing while bitcoin is trading around $13,718. Proportionally, if bitcoin were trading at $1.37 a coin, that would make its $30 fee worth about $.003.

MoneyGram’s CEO Alex Holmes noted “Every day blockchain technology is changing the norm and encouraging innovation. 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.”

The concept is sound enough, and quite possibly one of the biggest uses of cryptocurrency there is. Since it’s decentralized by nature, it makes it very easy to pass between countries using some fairly simple online infrastructure, which most places these days have. So sending a payment becomes just a little simpler in practice, especially if there’s a middleman involved. Someone takes their home currency, buys a slug of Ripple or the like, and sends it on where the recipient changes that Ripple into their home currency; it’s simple, and effective.

The potential benefit to Ripple, meanwhile, can’t be overlooked; a lot more people are about to be using this currency, which should make it more valuable in the near term. That’s good news for early investors, and one that gives the whole cryptocurrency concept a little something extra.