Payments startup Ripple has finished the procurement of its $50 million stake in remittance platform MoneyGram, the companies revealed on November 25.
As per a filing with the U.S. Securities and Exchange Commission (SEC), Ripple, in its last payment, purchased $20 million of MoneyGram equity at $4.10 per share, which is more than a dollar for every share over the stock’s present cost of roughly $3.00. Monday’s investment finalizes a deal initially started in June 2019.
With the finalization of the deal, Ripple owns just below 10 percent of MoneyGram’s outstanding common stock “and approximately 15 percent on a fully-diluted basis including non-voting warrants held by Ripple,” the filing stated.
Under the first arrangement, Ripple made an initial $30 million investment, while MoneyGram thus consented to use Ripple’s products for cross-border settlements.
As per the filing, MoneyGram plans to utilize this capital inflow to fund its operations, specifically as it grows its utilization of Ripple’s On-Demand Liquidity product, the renamed xRapid payment framework that uses the XRP digital currency.
Since June, MoneyGram has started utilizing XRP to facilitate transactions in Europe, Australia, and the Philippines, and presently executes about 10 percent of its Mexican peso foreign exchange volume, the filing stated.
In an announcement, MoneyGram chairman and CEO Alex Holmes stated the collaboration was “transformative,” underscoring that the firm could settle transactions “in seconds.”
“This initial success encourages us to expedite expanding our use of On-Demand Liquidity,” he stated. “I anticipate furthering our growth into new corridors and exploring new products and services.”
Ripple CEO Brad Garlinghouse included that his company would support MoneyGram’s “further expansion” into Australian and European payment corridors.