MoneyGram to test cryptocurrency Ripple

REUTERS  Mark BlinchA Bitcoin sign is seen in a window in Toronto

Shares of the money-transfer MoneyGram International Inc also jumped 10.5 percent after the the company said it partnered with blockchain firm and bitcoin-rival Ripple.

As part of the arrangement, MoneyGram will test the use of Ripple's cryptocurrency, XRP, to move funds in a faster and cheaper way.

Typically, existing money transfer companies need to have pre-funded accounts across the globe to ensure that they are able to facilitate transactions. Consumers don't have any reason to be loyal to one payment transfer company and so, if a competitor uses advanced technology promising a 4-second transfer, customers would flock and the payment companies will lose the business.

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"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", Brad Garlinghouse, CEO of Ripple said in a statement. Earlier, Ripple had commented that they have been teaming up with three of the world's biggest money transfer companies - however no names were announced. "We're hopeful it will increase efficiency and improve services to MoneyGram's customers", MoneyGram CEO Alex Holmes in a statement. Yesterday, a uniform pressure arose for the asset type - from Bitcoin to Ripple - when its headlines printed rumors that South Korea, one of the largest markets for cryptocurrency trading, was readying plans to ban the products.

This partnership comes shortly after the USA had blocked Alibaba's Ant Financial's takeover of Moneygram. With a digital currency such as the one Ripple provides, the wait time could be reduced. The two agreed upon expanding their digital payment methods globally, but the USA had blocked it, sending Moneygram shares down over 9 percent. Ripple is provider of the leading enterprise blockchain solution for payments.

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