MoneyGram International will use Ripple’s blockchain to boost foreign exchange settlement for international payments.
Under a two-year agreement announced Monday, Ripple has made an initial equity investment of $30 million in MoneyGram, including newly-issued common stock and the option to buy more in the future.
Ripple’s investment and advancement of its digital capabilities under a MoneyGram umbrella addresses a key need for Dallas-based MoneyGram as it continues to work to convert legacy systems for mobile and digital commerce.
MoneyGram has relied on traditional foreign exchange markets to meet settlement obligations, which require advance purchases of most currencies. Through the strategic partnership with Ripple, MoneyGram will be able to settle key currencies and match the timing of funding with its settlement requirements, a process it says will reduce operating costs and working capital requirements.
“Through our partnership with Ripple, we will also have the opportunity to further enhance our operations and streamline our global liquidity management,” said Alex Homes, MoneyGram chairman and CEO in a release.