Western Union reportedly insists on acquiring MoneyGram – a deal that could have a significant impact on Ripple and XRP
An unnamed source, “familiar with the matter,” told Bloomberg that Western Union had made an official takeover bid. MoneyGram has not yet decided.
MoneyGram partnered with Ripple in 2019 and used their cross-border payment product, powered by XRP, to process part of its remittances. Ripple owns approximately 10% of the shares of Dallas-based MoneyGram after completing a $ 50 million investment in the payment giant last year.
Western Union is currently exploring XRP’s potential to manage cross-border transactions, but is not impressed with the asset’s ability to save the company money. In June last year, CEO Hikmet Ersek said that early tests of the company with XRP showed that using cryptocurrency was five times more expensive than relying on Western Union’s internal system.
However, this perspective may change. In April, Credit Suisse researchers said Western Union continued to “test and consider using Ripple (XRP) for cross-border [payments],” despite the fact that the company was “less enthusiastic at first” about the 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 about $ 164 million as of Monday, in addition to debt of $ 878 million. Western Union has a market value of about $ 8.5 billion.
Despite the adoption of ODL, MoneyGram has not yet fully completed the transition from physical locations to cryptocurrency. Less than one-fifth of all of the company’s transactions in the first quarter of 2020 are digital, according to a quarterly report.
However, this shows signs of change. Digital transactions increased by 57% compared to previous years in the first quarter, while previous transactions decreased by 6%. And these trends continue only during the coronavirus pandemic, with digital transactions rising to 28% of the company’s remittances in the first 27 days of April.