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Ripple's Partnership with MoneyGram Criticized by Financial Times

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Fri, 28/02/2020 - 19:17
Ripple's Partnership with MoneyGram Criticized by Financial Times
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Financial Times, one of the world's leading business that is known for its grim outlook on crypto, has questioned the success of Ripple's much-hyped partnership with legacy money transfer company MoneyGram. 

FT's reporter Izabella Kaminska appears to take issue with the fact that the 10 $bln blockchain monolith actually has to pay MoneyGram for using its software. 

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Pay to play 

As reported by U.Today, Ripple's benefits turned out to be the juiciest detail of MoneyGram's Q4 earnings report. They totaled $8.9 mln in the fourth quarter alone ($11.3 mln together with the third quarter). 

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MoneyGram initially wanted to add the above-mentioned sum to the company's quarterly revenue before the Securities and Exchange Commissioned (SEC) recommended to count it as a contra expense. 

Kaminska suggested that Ripple could pay MoneyGram to offset losses incurred by its software.    

"Are they a subsidy Ripple is paying to MoneyGram to compensate them for loss of earnings for using their system? Some sort of kickback? Or a goodwill gesture, because why not?"    

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MoneyGram is not alone

While MoneyGram declined to comment on what Kaminska calls 'some sort kickback,' another Ripple's partner was more vocal about it. 

Ripple recently inked a deal with remittance service Azimo that will use the On-Demand-Liquidity solution for conducting transactions. 

Azimo CEO Richard Ambrose revealed that Ripple would pay his company to cover infrastructure expenses.

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