The current model for these payments requires money transfer companies to use pre-funded accounts across the globe for sourcing liquidity. However, the advent of new blockchain technologies has the potential to revolutionize this process by lowering the capital requirements for liquidity.
This is a very big selling point for Ripple, which has successfully courted some banks and payment companies for initial pilots.
"The payments problem doesn't just affect banks; it also affects companies like MoneyGram, which help people get money to the ones they care about".
US money transfer giant MoneyGram is testing the blockchain waters through a partnership with Ripple, the owner of the XRP digital currency. Ripple's blockchain technology and digital currency XRP could move money far faster, the companies said in a statement Thursday.
News that MoneyGram plans to pilot Ripple's cryptocurrency, XRP, as a means of improving cross-border payments ended a multiday slide in the cryptocurrency's price.
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"Every day blockchain technology is changing the norm and encouraging innovation". Ripple most recently announced it would be teaming up with Amex and Santander for a blockchain pilot to speed up payments between the USA and the United Kingdom.
Last week, Ripple (which is referred to as XRP) was the talk of the town amid rumours investors would soon be able to buy and sell it on the easy-to-use platform CoinBase.
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Ripple, whose price slipped by nearly 50% since the start of this week is finally back on an upward momentum as this news has given investors every reason to cheer. We all remember well that was the main reason Ripple's price skyrocketed the first time, nearly doubling its initial value before the rumors about a Coinbase entrance spread.
The companies will also test Ripple's other products, including xVia, according to the release.