- Western Union has reportedly made an offer to acquire money transfer company MoneyGram
- MoneyGram was reported to have a debt of $878 million as it was hit hard by COVID-19 outbreak
- Ripple prices have been trading mostly sideways in the past week
Last week, Bloomberg broke the news that Western Union made an offer to acquire money transfer company MoneyGram. No agreement has been reached yet and Western Union could still change their mind, accordingly.
It’s been a hard couple of months for MoneyGram due to the Covid-19 crisis. The company has a debt of $878 million and closed a number of work locations during the pandemic shutdown. Soon after Western Union made the acquisition offer, shares of MoneyGram jumped by almost 50%.
Despite the fact that the circumstances resulted in an increase in MoneyGram’s online transactions, the quarterly reports showed that online transactions accounted for 18% of total transactions in the first quarter.
Ripple is one of the stockholders of MoneyGram, owning 9.95% of the business. The two-year strategic business deal between the two was signed in June last year. As a part of the agreement, Ripple agreed to invest $50 million in Moneygram.
Recent remarks by MoneyGram’s president and CEO Alexander Holmes suggest that Ripple still hasn’t reaped the benefits of their partnership.
Holmes also added that the first quarter reports weren’t affected by Ripple in terms of value.
“I would say it was a little bit of a relatively quiet quarter, in the sense of really pushing anything particularly new into the market or expanding the service,” he said.
According to the deal, MoneyGram utilizes Ripple’s “xRapid product, a solution for on-demand liquidity, which reduces reliance on pre-funding by enabling money to be sent from one currency and instantly settled in the destination currency.”.
“We continue to flex with them as they continue to expand the service and move some things around, and really figure out what they want, the product to look and feel like, and how they want to take that to various markets. So I think it’ll change over time. I think the results of what we’re doing will vary by quarter and by month,” added Holmes.
It is still unclear what the impact will the potential takeover of MoneyGram have on Ripple. Not just that, but Ripple seems to be struggling to get to know what they really want to do with the MoneyGram partnership. Hence, it will be interesting to see what happens with Ripple if Western Union decides to complete the takeover of MoneyGram.
XRP trading sideways
Ripple prices jumped more than 4% after the news of Western Union’s takeover approach was first reported. XRP/USD hit a 3-week high above $0.2140, however, the buyers have failed to sustain the positive momentum and the price action has returned to $0.20. All in all, XRP/USD is trading around 1% negative on the week.
Looking at the daily chart, XRP/USD looks trapped between the two moving averages. The 200-DMA is what stopped the buyers from pushing further higher last week while the 100-DMA did the same job from the downside.
In case the Western Union takeover bid gains more traction, it is likely that new investors will jump in to buy XRP/USD, hoping to capitalize on the impending bullish reaction in the pair.
Although Ripple prices gained on the news that Western Union is attempting to buy MoneyGram, it looks it is still too early to think of the real impact this deal may have on Ripple and its business.