MoneyGram, a money transfer company, has received $11.3 million from Ripple, a blockchain-based payments startup, in the second half of 2019.
The company’s recent quarterly filings with the Securities and Exchange Commission (SEC) show that the funds were received in two quarters – $2.4 million in Q3, 2019, and another $8.9 million in the next quarter.
Notably, the funds received in Q4 were not included in the quarter’s revenue calculation and was accounted for a contra expense in its operating cost.
“Revenue excludes $8.9 million of benefit from Ripple, which will be accounted for as a contra expense rather than revenue based on a recent consultation with the Securities and Exchange Commission,” MoneyGram noted in the filing.
Ripple made its first investment in MoneyGram last June with $30 million and made a commitment of putting a total of $50 million. The blockchain startup also pumped another $20 million in the payments transfer firm, and though not specifically mentioned, the recent fundings are likely a part of that.
“MoneyGram continued to expand its strategic partnership with Ripple as the first money transfer company to scale the use of blockchain capabilities,” the filing noted.
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Ripple currently holds around 10 percent of MoneyGram and is pushing the company to utilize its blockchain-based solution.
Indeed, MoneyGram is already using Ripple’s On-Demand Liquidity product running on XRP and also piloted money transfer using XRP in 2018.
A week quarter
Despite the incoming funding from Ripple, the payment transfer company has seen a week Q4, as the figures went down 6 percent compared to the same quarter in the previous year.
“Revenue was $323.7 million, a decline of 6% from the fourth quarter 2018,” the filing added.
Despite the decline in profits, MoneyGram Online service recorded a 39 percent growth in the same quarter, driving this company’s service to receive a 113 percent growth in transaction demand and 53 percent growth in profits.