Komal Joshi · Oct 21, 2020 . 6min read
MoneyGram Receives $15.1M as Market Development Fees From Ripple in Q2
MoneyGram received $15.1 million from Ripple as "Market Development Fees" in Q2 results announced on Thursday.
By Komal Joshi · Aug 1, 2020 . 5min read
In its Q2 results on Thursday, the Texas-based remittances company announced it received $15.1 million from Ripple as “market development fees.” Its operating expenses involved an $8.8 million. Therefore, it was the net benefit from the paid incentives that was “partly offset” by $6.3 M worth of related transactions and trading expenses.
Ripple paid millions to Moneygram.
Ripple, presently has a 10% stake in MoneyGram. It declared its strategic alliance with the NASDAQ-listed remittance company in June 2019. However, the soundness of their tie-up was summoned into question after MoneyGram reported its full-year 2019 financial results.
According to its 8-K SEC filing, MoneyGram earned a combined $11 mln from Ripple in Q3 and Q4 based on the quantity transacted with Ripple’s software. After conferring with the U.S. Securities and Exchange Commission (SEC), it began incorporating these funds as contra expenses rather than Revenue.
In Q1 alone, Ripple gave $16.6 mln to MoneyGram, followed by the most current $15.1 mln compensation. MoneyGram gets these payments in XRP. However, the company doesn’t hold the cryptocurrency backed by Ripple. According to its CEO Alex Holmes’s CNN interview, “Any XRP that we receive we tend to sell about as real-time as possible.”
Drop-in Revenue by 14%
MoneyGram hit a rough patch in Q2, with its revenues declining by to $279.8 mln, due to the global crisis. The Dallas-based company resides in the red, posting a net loss of $4.6 mln. MoneyGram endured attaining a 106% increase in digital transaction corresponded to 2019 that now draws 27% of all of its transfers.
Holmes said in an official statement:
“The investments that we have made over the past few years have allowed us to build a fast-growth digital business which not only has higher customer retention and productivity rates, but also surpassed the walk-in business during the quarter delivering higher margins on average. With digital now representing 27% of money transfer transactions, the business is providing a significant contribution to our bottom-line results.”
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