MoneyGram shares jump on partnership with bitcoin-rival Ripple

FILE PHOTO: A MoneyGram kiosk is seen in New York
FILE PHOTO: A MoneyGram kiosk is seen in New York, U.S. January 3, 2018. REUTERS/Shannon Stapleton/File Photo

January 13, 2018

(This version of the Jan. 11 story corrects to say XRP rose to $2.25 instead of $13.38 paragraph four)

(Reuters) – Shares of MoneyGram International Inc <MGI.O> jumped 10.5 percent on Thursday, after the money-transfer company said it partnered with blockchain firm and bitcoin-rival Ripple.

As part of the arrangement, MoneyGram will test the use of Ripple’s cryptocurrency, XRP, to move funds in a faster and cheaper way.

Ripple, created by the founder of bitcoin exchange Mt Gox, has risen 31,000 percent over the past year, overshadowing bitcoin’s 1,200 percent increase.

XRP rose to $2.25 during trade on Thursday, according to coinmarketcap.com.

Many see it as a close contender to bitcoin, which is by far the biggest cryptocurrency with a market value of more than $250 billion. (http://reut.rs/2D0S11W)

XRP allows banks and payment companies to send money quickly, no matter the location. Its transaction fee, at just “fractions of a penny”, is also comparable to bitcoin’s $30 per transaction fee.

Several companies such as UBS <UBSG.S> and Santander <SAN.MC> already use Ripple’s products to enable payments. In November 2017, American Express Co <AXP.N> also launched an instant blockchain-based payment system using Ripple.

China’s Ant Financial’s deal to buy MoneyGram for $1.2 billion collapsed last week. (http://reut.rs/2D1nYqT)

(Reporting By Aparajita Saxena in Bengaluru; Editing by Saumyadeb Chakrabarty)