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According to Bitcoinist reports on March 23, in its recent annual report submitted to the U.S. Securities and Exchange Commission (SEC), MoneyGram announced $11.3 million in revenue from its cooperation with Ripple. Ripple
Labs pays the remittance company a fee to incentivize it to use RippleNet in its operations.

Image source: pixabay

Ripple revenue grows rapidly

Although MoneyGram's overall revenue continues to decline, the partnership with Ripple is clearly beneficial to the company. In the second quarter of last year, MoneyGram began using RippleNet’s On-Demand Liquidity (ODL), which proved to be very successful. The report states:

“MoneyGram develops and brings liquidity to Ripple’s FX trading market through the ODL platform and provides reliable levels of FX trading activity, resulting in XRP token returns for the company.”

Notably, of the $11.3 million MoneyGram received from Ripple, $8.9 million came in the fourth quarter. Given the overall growth of the Ripple platform, this number is likely to be even higher in 2020.

This activity indicates that Ripple
Labs is looking for ways to get financial institutions to use its services, and the results are proving positive. It also reportedly paid other partner agencies. In the case of MoneyGram, such a payment is a bit strange because Ripple
Labs already owns a sizable stake in the company. The agreement to use RippeNet expires in 2023.

Remittance companies urgently need to transform

MoneyGram’s partnership with Ripple demonstrates the company’s recognition that a major shift is taking place in global finance. Blockchain assets are playing an increasing role in global financial flows and threaten to render traditional remittance service providers obsolete. In fact, eliminating the need for companies like MoneyGram is a core design feature of Bitcoin.

By actively seeking cooperation with fiat financial institutions, Ripple Labs has become an early practitioner in the encryption field. Still, CEO Brad Garlinghouse
Garlinghouse has repeatedly emphasized that cryptocurrencies will be the best complement to the traditional economy, at least for now. In other words, Garlinghouse doesn't think central banks and their currencies are going away anytime soon.

Ripple’s strategy of bringing banking partners into its ecosystem is clearly working, but the extent to which these institutions are actually using RippleNet remains less clear, and they appear to be limited to the research phase. This is once again proven by the fact that Ripple had to pay them to actually use it.

At present, the cooperation between Ripple and MoneyGram has benefited both parties greatly. However, both companies undoubtedly understand that larger changes will soon have a huge impact on both companies' core businesses.