Ripple bagged another partner Coinone Transfer for Cross, the first South Korean blockchain-powered remittance mobile app. This app offers fast and low-cost payments to nearby markets like Thailand and Sri Lanka.
South Korea is one of the destinations where Ripple is focused on because of its fintech innovation and positive regulations regarding payment providers. Already, almost half of Ripple’s customers on RippleNet are based in Asia-Pacific (APAC). It’s latest additions Sentbe, Hanpasa, and WireBarley are also South Korea-based.
“South Korea is a hotbed of fintech innovation, and we’re committed to grow our customer base and presence,” said Emi Yoshikawa, Senior Director of Global Operations.
“Since the Korean government started licensing payment providers for remittance in 2017, we have witnessed how Korean payment providers dramatically improved payments experience for their customers, and we are pleased to be part of their on-going efforts.”
Ripple Paid $11.3 Million to MoneyGram
Ripple bagged another partner amidst the news that it paid its partner MoneyGram $11.3 million to use its software and digital asset XRP.
According to MoneyGram’s regulatory filing with the US Securities and Exchange Commission (SEC), it received a “financial benefit” of $8.9 million in the fourth quarter of 2019 and $2.4 million in the third quarter from Ripple that will be accounted for as “contra expenses”.
The payments company “continues to expand its strategic partnership with Ripple as the first money transfer company to scale the use of blockchain capabilities,” reads the company’s statement.
Last year, in a $50 million deal, Ripple had a strategic partnership with the money transfer giant.
A few months back, MoneyGram disclosed in its Q3 filing that they will “utilize Ripple’s On-Demand Liquidity blockchain product (formerly known as xRapid)” which uses XRP to facilitate cross-border settlements.
Also, in Nov. it was revealed that MoneyGram’s 10% of the transfers between the United States and Mexico were made through XRP.
Building New Infrastructure Costs Money
Ripple SVP, Asheesh Birla took to Twitter to clarify that that Ripple and MoneyGram are strategic partners and “building new infrastructure together.” This kind of market development he said “requires a ton of work, effort, and resources” which in turn, costs money.
Other payment companies like Visa and PayPal also employ “incentive programs” to boost their network adoption. Visa actually allocated $4.1B on incentives in 2019, said Birla.
The reason for MoneyGram using On-Demand Liquidity that leverages XRP and further expanding into other markets is because it helps them in saving cost and time, not because Ripple is paying them for it, said Birla.
“MGI said today that they are actively expanding to new corridors, and even working to integrate RippleNet for account-to-account transfers in 2020. ODL reduces their capital costs because of the product’s efficiencies, not because they are receiving any fee on the other side.”