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World’s second-biggest money transfer firm MoneyGram will start a partnership with Ripple to test the XRP's token for settling international fiat transfers.

According to Nasdaq’s press releases, MoneyGram is planning to test Ripple’s xRapid service which suppose to speed up fiat transaction settelments and reduce their costs. XRP's transactions fees are tramandously lower than those of the bitcoin network.

How online money transfers works?

Online money transfer is where the old-fashioned of wiring money adopts with modern technology of electric funds transfer (EFT). Online money transfers is not the way of paying your bills over the internet but a modern alternative for instant of wiring money.

With over 350,000 locations around the world, MoneyGram offers a simple 3-steps method of international funds transfering.

I am living in London (UK), and I am willing to send money to my brother who is right now travelling in Sydney (AUS)

How does MoneyGram works? Pretty simple.

Ripple’s speed is much higher than Bitcoin’s what makes it more attractive to MoneyGram. Currently a Bitcoin transaction takes almost a hour where an average transaction on the XRP networks takes 2-3 seconds. MoneyGram mentioned in a statement:

"XRP remains the most efficient digital asset for payments with transaction fees at just fractions of a penny, compared to bitcoin fees of about $30 per transaction.”

MoneyGram believe that by collaborating with XRP’s digital asset xRapid they will benefit from lower capital requirements for liquidity and help the firm to reduce liquidity costs

The Ripple Team said in an official blog post:

“Money transfer companies allow people to send cross-border payments. Unfortunately, the current model requires money transfer companies to use pre-funded accounts across the globe to source liquidity for these payments.”

“The payments problem doesn’t just affect banks, it also affects companies like MoneyGram, which help people get money to the ones they care about,” said Brad Garlinghouse, CEO of Ripple. “By using a digital asset like XRP that settles in three seconds or less, our clients can move money as quickly as information.”