Western Union Co is making an attempt to take over MoneyGram Inc. in a deal that could see the two remittance giants merge, a report from Bloomberg has confirmed.
Although no public statement or decision has been made about the acquisition, the deal could greatly affect the Ripple-MoneyGram relationship as Bloomberg reported that its source said Western Union is making a takeover offer and it could move forward without a deal.
Due to the downslope seen in the remittance business and the call for a reduction in transaction fees from policymakers, the two companies have opted for a digitalized means of remitting transactions.
Revisiting Stellar Partnership with Thunes
Ripple Labs Inc partnered MoneyGram and acquired a 10 percent stake in the second-largest remittance firm. Since then, MoneyGram has witnessed significant growth in stock and transactions processed digitally.
However, do not forget that the Western Union signed a deal with Thunes, previously known as TransferGo, to let people transfer money to mobile wallets to different parts of the world directly.
Thunes a cross-border payments service provider also partnered the Stellar blockchain co-founded by a former Ripple co-creator Jed McCaleb.
Interestingly, Western Union partnered with Thunes to further its remittance service digitization agenda. Upon partnering with Thunes, Western Union said it would let the unbanked population have access to finance and increase financial inclusion worldwide.
When Thunes collaborated with Stellar blockchain, the fintech firm also said integration with the blockchain technology would let it offer a more seamless and effective across the border remittance services.
Before the collaboration, Thunes claimed to be offering users with real-time, secure, and low-cost transfers, however, the integration of the blockchain technology into its system helped promote these services.
Although Western Union is interested in blockchain technology, the Global President of the largest remittance firm, Odilon Almeida, declared in a statement that cryptocurrency needs to solve issues related to volatility, governance and compliance, before it could get adoption from Western Union and some other big firms.
Despite the statement, Western Union has been testing Ripple (XRP) blockchain technology for some while now, and it may have been enjoying Stellar blockchain technology through Thunes.
While the result of the Ripple blockchain it tested in the past was not proclaimed, there’s no positive hope on weather Western Union will adopt Ripple.
If WU acquires MoneyGram in a takeover deal, it is possible the latter may stop the use of Ripple’s ODL products for transactions and focus on using Thunes to let its clients transfer fund to mobile wallets directly, because, Ripple-MoneyGram deal will only last for two years and one year has passed now.
Worthy to note that no official statement has been made about the acquisition of MoneyGram not to talk of whether MoneyGram will continue using XRP through Ripple’s On-Demand Liquidity.