In a just-released earnings report, Ripple partner, MoneyGram, showed a USD $11.9 million loss for the fourth quarter of last year. This is the fifth consecutive quarter without a profit. Nevertheless, the company’s partnership with Ripple is set to open new sources of revenue.
REVENUE FROM RIPPLE PARTNERSHIP IS OBSCURED
Whereas there are many factors that are contributing to MoneyGram’s continued losses, the company has clearly been affected by the growing role of cryptocurrency in international remissions. Last year’s much-hyped partnership with Ripple indicated that the money transfer business had come to respect the power of blockchain assets, and intended to modernize its services.
Ripple XRP Moneygram
Interestingly, the Q4 report notes that after consulting with the U.S. Securities and Exchange Commission (SEC) the company will classify $8.9 million in revenue from its Ripple partnership as contra expense. This move, an accounting classification often taken to simplify tax returns, is almost certainly related to the unresolved question of whether or not XRP is a security.
REMISSIONS MARKET CHANGING RAPIDLY
Analysts consider MoneyGram’s partnership with Ripple to be a smart move for the company. The cryptocurrency revolution has remissions squarely in its crosshairs. This step will enable MoneyGram to introduce new revenue streams as the traditional methods used to move fiat around the world begin to dry up.
There are, nevertheless, greater challenges ahead. Notably, many other companies are now entering this sector. JP Morgan and IBM both have blockchain-based solutions in the works, and the Swift Network is aggressively exploring new options as well. Simply put, although Ripple and MoneyGram are in strong positions, they are about to experience substantial competition.
Perhaps the greater long-term issue is the the borderless, decentralized architecture of blockchain assets. Mainstream crypto adoption could render traditional fiat currency, and thus MoneyGram, obsolete. There is no question that all players in this space have considered this possibility, which would represent a paradigm shift in the global economic structure.
A Q4 loss may be frustrating, yet MoneyGram can rest easy knowing that it is taking proactive steps to ensure a return to profitability. The company’s ability to adapt to greater changes ahead remains to be seen.
What do you make of Moneygram’s recent losses? Add your thoughts below!
Images via Shutterstock
The post Ripple Partner Reports Loss In Q4 2019 appeared first on Bit News Live.