In the world of large mergers, the news being reported by Bloomberg that suggests Western Union may want to acquire MoneyGram would bring together two of the largest U.S. providers of money-transfer services.
The idea behind this merger is to try and bolster a flagging industry that once relied heavily on such finance giants to affect cross border payments. But, in recent times, there has been a surge towards Fintech start ups, and even the cryptocurrency space.
This potential merger then brings into question where Ripple would feature in the takeover from Western Union, and if the payments portal would be interested in advancing the cryptocurrency company, or cutting ties all together.
Western Union, by far the larger company with a market value of $8.5 billion in comparison with MoneyGram which has a value of just $164 million, would be picking up a business that is actually lagging in a time where cross border payments should be booming.
MoneyGram has struggled during the coronavirus pandemic, which has forced it to shutter operations around the globe as governments imposed shelter-in-place orders. While MoneyGram has boosted digital transactions, they made up just 18% of its money transfers in the first quarter, the company reported last month.
This stuttering performance comes after the important partnership was made with Ripple and its XRP token. In June 2019, the deal was made that saw Moneygram using Ripple’s on-demand liquidity (ODL) cross-border payments product in their daily operations through RippleNet. Six months later at the Swell 2019 conference organized by Ripple, Moneygram CEO Alex Holmes announced that it is moving 10% of its total transaction volume between the United States and Mexico using Ripple’s ODL.
Will Western Union jump into Crypto?
With this partnership with MoneyGram already sealed and in operation, if WU does decide to buy out MoneyGram, it will be faced with a question as to what it will do with Ripple and XRP. This could, of course, give an entrance into the crypto space for the large money transfer platform, but it could also not be what they are looking for.
Ripple has faced a number of issues of late in terms of its market dumps, and even a suggestion that Ripple paid MoneyGram to implement its ODL. This may well deter WU from following on with Ripple, even if they have an interest in digital currencies and payments.