Western Union is reported to have lobbied to acquire MoneyGram - a deal that could have a significant impact on Ripple and XRP .
An anonymous source “familiar with the matter” told Bloomberg that Western Union had made a takeover bid. MoneyGram has not yet decided.
MoneyGram partnered with Ripple in 2019 and uses the cross-border payment product of the fintech XRP start-up , On-Demand Liquidity, to process part of its remittances. Ripple owns about 10% of the common stock of Dallas-based MoneyGram after making a $ 50 million investment in the payments giant last year.
Western Union is currently exploring the potential of XRP to fuel cross-border transactions, but is not being sold for its ability to save money. In June of last year, the CEO Hikmet Ersek said the first tests of the company with XRP have shown that the use of cryptocurrency was five times more expensive than the use of the internal system of Western Union.
This perspective could, however, change. In April, Credit Suisse researchers reported that Western Union continued "to test and consider using Ripple ( XRP ) for cross-border [payments]" despite the fact that the company was "initially less optimistic" about technology.
MoneyGram and Western Union are two of the largest money transfer companies in the United States. Bloomberg reports that MoneyGram has a market value of around $ 164 million on Monday, in addition to $ 878 million in debt. Western Union has a market value of approximately $ 8.5 billion.
Despite the adoption of ODL, MoneyGram has not yet fully transitioned from brick and mortar to cryptography. Less than a fifth of all of the company's transactions in the first quarter of 2020 were digital, according to a quarterly report.
However, this is showing signs of change. Digital transactions have increased 57% year-on-in the first quarter, while transactions without appointments have dropped 6%. And these trends only continued during the coronavirus pandemic, with digital transactions reaching 28% of the company's money transfers in the first 27 days of April.