Ripple's transaction time is about 2-3 seconds, while bitcoin ranges anywhere from 15 minutes to an hour.
MoneyGram will pilot the use of XRP, the native digital asset of the XRP Ledger, in payment flows through xRapid, Ripple's solution for on-demand liquidity. Also as part of this agreement, both companies also will explore MoneyGram's integration into Ripple's ecosystem through xVia. Moreover, Ripple charges about a penny compared to a transaction fee of nearly $30 that Bitcoin charges.
Money transfer companies, like MoneyGram, allow people to safely and efficiently send cross-border payments to friends, families and business partners.
The company has historically been involved in using pre-funded accounts to fulfill transfers by customers, which can tie up capital.
MoneyGram is testing a pilot program with one of the most popular cryptocurrencies.
"The inefficiencies of global payments don't just affect banks, they also affect institutions like MoneyGram".
The goal of the pilot is to "move money as quickly as information", Brad Garlinghouse, CEO of Ripple, said in a statement.
While banks around the world are experimenting with blockchain (the underlying technology behind bitcoin and Ripple) to lower money transfer costs, skeptics of Ripple say its XRP currency is unnecessary to carry out transactions.
Alex Holmes, CEO of MoneyGram said: "Every day blockchain technology is changing the norm and encouraging innovation".
The ability to send money globally in real time has caught fire in the worldwide financial industry.
According to a press release, MoneyGram will test Ripple's xRapid service due to its claimed speed and cost efficiency.
Ripple is a cryptocurrency (XRP) issued by a blockchain startup of the same name and has enjoyed an astonishing rise in 2018 following in the footsteps of bitcoin. The two agreed upon expanding their digital payment methods globally, but the USA had blocked it, sending Moneygram shares down over 9 percent.