Is Ripple's recent acquisition into MoneyGram simply a marketing ploy?

18 Jun, 2019
by Ryan Boltman
Analysis
Is Ripple's recent acquisition into MoneyGram simply a marketing ploy?

Big news came out from Ripple this weekend that the company would be buying a stake into international money transfer company MoneyGram. However is the new deal simply a ploy to keep Ripple relevant?

The partnership announcement with MoneyGram came as a big surprise, with one of the most popular digital currencies partnering with international money transfer company MoneyGram, many would call it a match made in heaven in terms of mass adoption for transmitting of funds across borders.

According to a report by Fortune, Ripple will pay $4.10 per share and acquire between 8-10% stake in MoneyGram, equating to roughly $30 million.

Ripple CEO Brad Garlinghouse was interviewed about the partnership stating that "This will eliminate the need to deploy foreign bank accounts. That’s why MoneyGram has negative working capital. It will help customers and also smooth out their treasury operations,"

Ripple had previously been working with Western Union in an attempt to see if there was synergy between both companies, but Western union decided they already matched the capabilities that Ripple offered.

While the offering is not so much a partnership, but rather a small acquisition of a percentage MoneyGram, the deal may have been presented more so as a partnership of services.

MoneyGram at this stage are not making use of Ripple technology and the deal could simply be a business investment for Ripple to diversify into the traditional payment space. MoneyGram CFO Larry Angelilli commented on the deal, saying "We are very pleased with the terms of the Ripple investment which supports the Company with permanent capital and additional liquidity".

The deal could also simply be a marketing move from Ripple to remain relevant after the project has stagnated somewhat in the 2019 bull season. Ripple have yet to find a way to ultimately make use of their technology on a larger scale, and with Facebook set to launch their blockchain cryptocurrency project in the coming weeks, heavy competition can be expected.

Ultimately, Ripple have simply invested in a payments company that is used worldwide and can claim a share of MoneyGram, but by no means is Ripple being implemented into that company at this point.

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Read more about: Ripple (XRP)

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