Quick take:
- Western Union has reportedly made an offer to acquire its one-time rival, Moneygram.
- The offer is yet to be made public but its possibility will bring together two of the largest remittance service providers.
- Moneygram is one of Ripple’s strategic partners in the remittance industry.
News coming in from the team at Bloomberg indicates that Western Union Co. has reportedly expressed interest in acquiring its biggest competitor: MoneyGram International Inc. If true, the deal would bring together two of the largest global remittance providers. According to Bloomberg, the deal is yet to be finalized and representatives from both Western Union and Moneygram are yet to confirm the details of the transaction.
Deal Could be in a Bid to Fight off Competition
In the last couple of years, the money remittance industry has been disrupted by plenty of startups offering faster and cheaper cross border transactions. Additionally, the use of digital assets and their quick conversion to usable fiat has made the process faster and doable from the comfort of a standard smartphone. One needs only to send popular cryptocurrencies such as Bitcoin, Ethereum, Nano via a trusted wallet or crypto exchange and the recipient does an instant conversion to fiat using services such as BitPay, LocalBitcoins or RemiTano.
How Does it Affect Ripple’s Partnership with Ripple?
The news of a possible deal that would bring together two of the largest financial services further brings into question as to how the merger/acquisition will affect MoneyGram’s partner of Ripple. The latter two companies announced a strategic partnership in June 2019 that was to push the usage of xRapid as a solution for on-demand liquidity using XRP to make remittances more efficient.
Additionally, between June 2019 and February 2020, Ripple had reportedly injected $50 million and an additional $11 Million into MoneyGram. Regarding the latter amount, no exact details were provided on the usage of the funds but MoneyGram explained it was part of compensation by Ripple for developing and bringing liquidity to foreign exchange markets using Ripple’s technology as well as providing a substantial level of foreign exchange activity.
Therefore, investors and traders can only speculate as to how Ripple technology and XRP will be utilized if the deal goes through. From as way back as 2018, Western Union has mused with the idea of using Ripple technology. However, no commitment has been made to using any of Ripple’s solutions. This might change if the deal with MoneyGram is a success.
XRP Army Responds to the News of a Possible Acquisition of Moneygram by W.U
Speculation as to what the future holds for Ripple if the deal is finalized has also made its way into the XRP community as can be seen in the following comments via Twitter.
What if they bought MoneyGrem and stop using ODL and ILP in order to slow down Ripple? Nowaday many rich haters spend so much time and resource to FUD about Ripple and XRP. – @XcoinBlog
Good, it means instant adoption of ripplenet and ODL for western union via moneygram – @Lionel46294550
Not sure what to make of this yet. Or how it affects the @Ripple investment into @MoneyGram – @Edge247
The Tweets were in response to the following question posed by XRP community member @stedas..
Western Union to buy MoneyGram?
Good or bad?#xrp #xrpcommunity #fintech #crypto @Ripple pic.twitter.com/lUuWQiW0Bw
— XRP_Cro (@stedas) June 1, 2020