The major payments giant Western Union is now in the Ripple news for its interest in purchasing the major money transfer company MoneyGram. As you know if you are reading our crypto news daily, MoneyGram is co-owned by the American blockchain company Ripple Labs, which is focused on payments technologies – and Western Union could soon acquire it.
Currently, Western Union wants to buy MoneyGram and join forces as two of the largest US providers of money-transfer services. The firm has already made a takeover effort, according to Bloomberg, which cited an undisclosed person familiar with this matter.
As the person claimed, a decision on the matter has not been made yet. However, the report went viral because it states that while more people are turning to online payments, the COVID-19 pandemic lockdowns and shelter-in-place orders imposed by governments led the payments company to struggle with keeping local branches open around the globe. This is why some of them had to close their doors and why the digital transactions accounted for 18% of the company’s money transfers in the first year.
Following some rumors in early June, Western Union could buy Ripple’s MoneyGram a couple of months after the latter was acquired by a crypto company. Ripple has a deal under which it made a $30 million initial investment and holds the right to another $20 million over two years. The second investment was made in November, when the American blockchain company Ripple said that they will own 9.95% of the outstanding common stock of MoneyGram and around 15% on a fully diluted basis including some non-voting warrants.
On their part, MoneyGram said that they will use the xRapid solution by Ripple which aims at minimizing liquidity costs and is ran by the Ripple-affiliated XRP token. On May 1, during a Q1 2020 earnings call, the chairman and CEO of MoneyGram Alexander Holmes described the timeframe as “a little bit of a relatively quiet quarter, in the sense of really pushing anything, particularly new into the market or expanding of the service.”
While MoneyGram’s walk-in cash remittance business declined by 19% in April, the company is now better positioned to respond to locked-down migrants and their need for digital alternatives to cash references. Meanwhile, XRP is trading at $0.201 in the crypto news with a new correction which swept gains from the markets.
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Stefan has been writing articles for DCForecasts since 2016 in-house full time. As one of our main cryptocurrency writers, he focuses on covering the latest cryptocurrency news, technical charts, price analyses of coins and press releases. When he is not exploring and covering the latest topics in crypto, you can find Stefan playing basketball, tennis or cycling.
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