MoneyGram’s Q2 financial report reveals that over $15 million worth of XRP was paid to the company by Ripple. The report says the payment was an incentive for the use of Ripple’s payment solution, On-Demand Liquidity (ODL). The payment was pigeonholed as “market development fees” in MoneyGram’s financial report.
According to reports, this is an incentive that Ripple has been paying MoneyGram for a while now. In Q1, Ripple paid the sum of $16.6 million in incentives, more than that of Q2. A MoneyGram official says the company does not hold any XRP and sells all the units it receives from Ripple. As of March 2020, MoneyGram had sold $11.3 million worth of XRP it got from Ripple.
MoneyGram and Ripple entered into a business partnership more than a year ago. As part of the agreement, MoneyGram uses Ripple’s ODL solution to facilitate cross-border payment. Ripple also has a 10% stake in MoneyGram which was sealed with a $50 million investment in June 2019. MoneyGram has since been exploring ways to expand its use of ODL for payments for its customers.
Out of the $15 million, the company claims it used $6.3 million in transaction expenses and had only $8.8 million as net income. Ripple’s investment in MoneyGram has helped significantly in promoting MoneyGram’s business. According to the financial report, the payment giant, experienced a 106% increase in digital transactions, now accounting for 27% of its total transactions.
“The investments that we have made over the past few years have allowed us to build a fast growth digital business which not only has higher customer retention and productivity rates, but also surpassed the walk-in business during the quarter delivering higher margins on average. With digital now representing 27% of money transfer transactions, the business is providing a significant contribution to our bottom-line results,” MoneyGram’s CEO Alex Holmes said in a statement.