MoneyGram CEO Says Ripple and XRP Could ‘Truly Transform’ Global Payments
MoneyGram CEO Alexander Holmes is offering new insight on the company’s partnership with Ripple.
The two companies teamed up in June, with Ripple buying a $50-million stake in the payments giant.
MoneyGram is now using Ripple’s XRP-based On-Demand Liquidity (ODL) to move 10% of its daily transaction volume between the US and Mexico, and is exploring ODL’s potential in Asia and Australia.
In a new interview with CNN, Holmes says he now believes Ripple, XRP and blockchain technology at large have the potential to transform the payments industry.
“What’s interesting about Ripple and what’s happening in the blockchain space is for the first time, there’s a technology available that has the potential to truly transform that capability and actually move money with data, which to me is kind of magical in a lot of ways because it’s really what the future is all about.
How do you instantly transfer funds? How do you instantly transform the business without, as Brad [Garlinghouse] would say at Ripple, with all this trapped liquidity around the world? So that’s what’s exciting about Ripple. That’s what’s exciting about their technology platform and all the change they’re trying to drive and all the innovation they’re trying to drive. I think they not only have the best platform to do it efficiently, but they also have the vision that encapsulates what we’re trying to do as well. How do you drive down costs? How do you improve throughput? How do you drive efficiency and provide a better service not only for our customers but also for the future and potential customers that are coming.
I think Ripple and its cryptocurrency XRP is really innovative in that sense. They’ve driven well over 300 partners around the world. Some of those are banks. Some of those are other remittance providers like MoneyGram. And so there’s just sort of an infinite possibility as you build out that network and the associated touch points through that channel and through that capability.”
Holmes says ODL allows the company to stay compliant with regulators and avoid holding XRP directly. He says the technology can lead to cost savings that can either be passed on to customers or to shareholders.
“To have liquidity parked in all these markets around the world, for the purposes of instant settlement, takes a lot of working capital. It takes a lot of cash and it takes a lot of forward thinking to preposition money out there.
And if you always think about currencies never really being stable. Currencies are always quite volatile. And so the fluctuations in that are moving all the time. If a customer wants to send $300 from the US to Mexico, we’re giving them a rate. We’re locking in that rate. But the price at which we have to buy Mexican pesos for purposes of settlement in Mexico, that could be at a totally different price point by the time we get to actually pre-positioning that currency.
So if you’re able to take that $300 that consumer wants to send and actually settle it instantly, real-time and give the same rate to MoneyGram that you’re giving the customer, it’s actually a very interesting opportunity to streamline and take costs out. And yes, those costs then can be passed back to customers or as a public company they can also be driven to help improve margin and profitability for the customers as well, for shareholders.”
You can check out the full interview here.