MoneyGram is one of the world’s fastest-growing money transfer company and it possesses a huge market share in the United States. Recently, MoneyGram has announced many new partnerships to sustain in the market amidst tough competitions from its other peers. In an interview with CNN’s Julia Chatterley, MoneyGram’s CEO Alex Holmes described in detail about their vision and partnership with the crypto major, Ripple.
CNN correspondent Julia asked Alex the role of MoneyGram and what the company is doing to tackle border digitization. Alex briefly explained why it is the best time to focus on cross border transfer. As per him, as cross border migration is on the rise, people are sending money in huge volumes from one country to another. MoneyGram has been working traditionally on agency network basis covering 350,000 locations spreading across 200 countries in the world. However, in recent years, MoneyGram has been forwarding with an aim to modernize the way of business by introducing digitization. To cope with the advancement in the whole industry and across the globe, MoneyGram aims at making a paradigm shift in the way it handles money transfers.
When asked about the percentage of transactions done digitally compared to in-store transactions, Alex indicated that they are still miles to go before catching up on the global average of 40%. As far as the last quarter’s statistics are concerned, MoneyGram’s one-fifth of all transactions were done in digital mode. Alex also added that over the last 24 months, they have been increasing their online presence in many countries and they seemed to be pretty excited about the new changes like app launch, loyalty program, and transaction notifications.
Julia asked Alex about the rationale behind choosing Ripple as its partner and about the investment of 50 million USD that happened in June. To which Alex replied that moving money cross border is an extremely tough and complex task to do. He further explained that in the case of cross-border transfers, money physically doesn’t move, but it is the data that moves. To do that, they have to make the settlement engines available in the receiver’s country and place liquidity as well that requires loads of working capital in almost 122 different currencies. As per Alex, the whole crypto industry and blockchain technology have the potential to transform the money transfer market as it facilitates instant transfers. On specifically why Ripple, he explained that the partnership with Ripple helps them understand how they can send money without holding liquidity all over the globe and it copes with their vision as well. He said, “They (Ripple) also have the vision that encapsulates what we are trying to do as well […] I think and Ripple and its crypto XRP are innovative in that sense.”
Julia asked Alex whether the association with Ripple is only about the instant transaction, or it is also related to bringing down the costs. To which Alex replied as of today, the transaction cost should be minimum and the transaction should be done instantly. However, this has not been possible because of the high cost of foreign exchange, banking transaction cost and volatility of the value of currencies. With the association with Ripple, they aim at checking both.
Quoting the most popular question, Julia went on asking if Alex holds any digital currency or XRP. Alex clarified that neither he nor MoneyGram holds any digital currency or XRP due to cumbersome regulations and changing accounting standards. MoneyGram tends to hold XRP for a while only to sell it for the completion of transactions on behalf of its customers. Alex also added that by tying up with Visa Direct, they are aiming at enhancing their global presence and competing with the organizations providing free service.