The news: MoneyGram customers can now buy, sell, and hold Bitcoin, Ethereum, and Litecoin directly from the MoneyGram app, per a press release. The feature is powered by crypto exchange Coinme.
How we got here: MoneyGram has made several investments in cryptos over the last year to differentiate itself from competitors like Western Union and Wise and drive its digital remittance business.
MoneyGram CEO Alex Holmes advocated for digital currencies at the Finovate Fall 2022 conference, saying that the company was “disrupting itself” to cater to a younger, digital-native customer base.
MoneyGram’s opportunity: The new crypto feature, while not directly tied to its remittance business, can help increase engagement with MoneyGram’s app—positioning it as a digital-first provider and encouraging consumers to use its online channels for cross-border payments. This can help bolster the firm’s digital transaction volume, which grew 36% year over year (YoY) in Q2 and accounted for 44% of all money transfers in the quarter.
The solution also reflects MoneyGram’s commitment to digital currencies, helping it remain at the forefront of the emerging crypto remittance sector. MoneyGram could eventually use it as a springboard to enable crypto remittances directly from the app.
Will it work? MoneyGram’s interest in cryptos may stem from the belief that digital currencies can reduce costs and increase payment speeds for remittances. However, some experts say it’s more complicated than that.
But digital currencies do have clear remittance use cases. For instance, consumers living in countries with high currency volatility can use stablecoins pegged to the US dollar to improve their buying power.
This article originally appeared in Insider Intelligence's Payments Innovation Briefing—a daily recap of top stories reshaping the payments industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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