MoneyGram Partners Up With Ripple
Ripple made waves in the equity markets this month when it committed $50 million in capital for equity in the money transfer company, MoneyGram, briefly sending the stock (MGI) up more than 100% in after-hours trading.
Per FinTech Futures:
With the aim of cutting the costs and timescales associated with settlement processes using traditional foreign exchange markets, which require advance purchases of most currencies, the partnership will focus on Ripple’s on-demand liquidity product, xRapid.
xRapid utilises the cheaper and more efficient XRP, the native digital asset of the XRP Ledger, as a real-time bridge between the sending and receiving currencies. Transaction fees cost less than a penny, compared to about $30 per transaction for other digital assets, and average transaction time is reduced to two or three seconds.
Ie, Ripple sees the partnership as a way to to promote xRapid and capitalize on MoneyGram’s growth, meanwhile MoneyGram is improving its own product and gaining valuable capital from Ripple’s investment.
Facebook’s Libra Network Revealed
This time last month, Facebook raised some eyebrows when news broke that they had formed a mysterious Swiss-based fintech firm called Libra Networks. Fast forward to July and practically everyone attuned to the technology sector has heard of the new Libra token, built on an open-source(sort of) blockchain much like that of Bitcoin.
Unlike Bitcoin, however, the Libra token is backed by a basket of sovereign currencies; the US Dollar, Euro, British Pound, and Swiss Franc to be exact. For example, 1000 Libra might be equal to 250 USD, 250 EUR, 250 GBP, and 250 FR combined.
Despite what some initially believed, the Libra is not being primarily marketed as a competitor to the Venmo’s of the world. Instead, Facebook and the consortium behind Libra Networks envision the digital token being used by the millions of unbanked, with full integration into WhatsApp and other smart phone applications that they already have. One target market might be Venezuelan citizens, who have seen their purchasing power wiped out with unprecedented levels of inflation on the Bolivar. The emerging markets of Africa are another area with intriguing potential for widespread Libra adoption.
The consortium behind Libra Networks includes several big names in the payments space, including Mastercard, Uber, Paypal, Coinbase, Stripe, and Visa. Each will pay $10M to participate in maintaing the blockchain’s ledger, essentially making their $10M investment a ticket to watch the show from the front row. None of the involved companies have made noteworthy comments regarding their participation, but it seems as though they too are still figuring out what role they will be playing in Libra’s operations.
Pillar Closes $5.5M Round of Seed Funding
As tuition costs skyrocket and startups find intuitive ways to enable financial fitness, it seems natural that student loans would be the next problem tackled by a fintech. According to TechCrunch:
Student loan debt is the second largest type of consumer debt in the U.S., with 45 million borrowers owing more than $1.5 trillion in student loans. Seven out of 10 students take out loans to pay for college, and the average person graduates with $30,000 in debt, which takes 20 years to pay off. For those with $60,000 in debt, it can take more than 30 years to pay off. And nearly 20% of borrowers have more than $100,000 in debt.
Pillar is a new app designed to inform users how much progress they have made towards paying off student loans and analyze spending behavior to identify when they might be able to pay off bigger chunks of the debt. The app is integrated with all the major student loan providers, so users can opt to make payments through Pillar rather than going through the providers’ websites.
The Pillar app is already available on the app store but users will need to join the waitlist before gaining access to the platform.