Ripple paid MoneyGram a ‘market development fee’ of $9.3 million for the 3 months ended September 2020, and $41 million year-to-date.
According to Money Gram’s Third Quarter report, it made $8.9 million from the $9.3 million paid out in Q3 2020 partially offset by related transaction and trading expenses of $0.4 million.
MoneyGram defines market development fees as the compensation for providing liquidity to Ripple’s On-Demand Liquidity (ODL) network – the settlements layer using the XRP token to send money across borders.
However, it appears that MoneyGram does not hold any XRP paid out to them by Ripple. In fact, a MoneyGram spokesperson reportedly told The Block that they sell XRP as soon as they get it.
Ripple has a 15% stake in MoneyGram, after completing a $50 million investment in the remittance platform.
As odd as the arrangements of this strategic partnership may seem, MoneyGram’s strong financial performance can be accredited to the growth of their digital business, which Ripple plays a significant part in.
“The amazing performance of our digital business drove yet another impressive quarter as the Company continues to build upon its financial growth trajectory,” said Alex Holmes, MoneyGram Chairman, and CEO, further stating, “It’s exciting to see the successful execution of our digital transformation be a catalyst for sustainable and profitable growth.”
According to reports, cross-border online transactions and revenue grew an impressive 176% and 174%, respectively, year-over-year for the third quarter.
MoneyGram also noted that they expanded global account deposit and wallet presence as well as launched new partnerships globally. This may see Ripple in an adequate strategic position should it choose to leave the US.