The trial will see MoneyGram use XRP in payment flows through Ripple's payment network xRapid in an effort to speed up and cut the cost of transferring money. Moreover, Ripple charges about a penny compared to a transaction fee of nearly $30 that Bitcoin charges.
XRP is fast too.
Money transfer companies, like MoneyGram, allow people to safely and efficiently send cross-border payments to friends, families and business partners.
He added by using Ripple, MoneyGram will be in a position to move money "as quickly as information".
Banks within the Japan Bank Consortium are one of many institutions that are actively working with Ripple to solve the multi-trillion dollar problem plaguing the financial industry, corporates and consumers worldwide - the lack of liquidity (or cash) to instantly send or receive low-priced global payments.
There are miles to go before a cryptocurrency-based system replaces correspondent banking, but MoneyGram's pilot looks like a step toward a world of faster, simpler, cheaper global payments.
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.
"Ripple is at the forefront of blockchain technology and we look forward to piloting xRapid", said Alex Holmes, chief executive officer of MoneyGram, in a press release.
Ripple provides one frictionless experience to send money globally using the power of blockchain. "We're hopeful it will increase efficiency and improve services to MoneyGram's customers", he said. To execute cross-border payments today requires financial institutions to rely on a complex web of relationships with correspondent banks in other countries. That makes the process for payments costly and slow.