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Hi everyone,

I am new to the chat, but have been reading it since 2017.

I have never doubted Ripple's narrative of ODL advantages over current methods for cross-border payments (faster, more reliable, feeing of nostro accounts). However, I have to admit this belief may solely be the result of the trust I have in Ripple (management team, available growth metrics etc.). In addition, I have never come across any serious rebutal or criticism of Ripple's ODL solution which was not obviously malicious.

Until I came across the following article: https://www.saveonsend.com/blog/moneygram-money-transfer/

This article, on Moneygram, completely undermines Ripple's ODL impact on Moneygram and contradicts Ripple's narrative with regards to ODL advantages (see end of the article).

I had a quick glance at the blog and it seems that (i) the owner is quite knowledgeable about remittances, and (ii) does not seem to support one actor in particular (maybe he has a broader agenda ?).

What do you guys think ?

[I know this sounds like FUD but I assure you it is not!! you have to take my word for it..]

Thank you all.

 

 

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Hi,

Thanks for your reply.

The main point being in my opinion that the dormant capital freeing via OLD does not amount to a lot of funds (taking MGI's example in Mexico).

Overall I was surprised by this article because I cannot identify who this guy is "rooting for", which interests he is defending. Most of the times in this space, it is obvious (bitcoin maxis, swift) but here it is not. In addition, the article is documented which, again, is not something that you see often in this space.

I am in no way saying this is a good article, but it picked my curiosity because of the above points.

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I imagine that as of right now, the beginning of this journey, that dormant capital is not being freed right and left.  After a measure of trust is established with digital assets then only will institutions become comfortable with freeing their capital in the way we expect.  I think it will take some time for these improvements.  Moneygram ,for example, is only a few months into their new mission so expecting *too* many changes all at once is maybe a bit too hopeful at the moment?  Looking forward to new Moneygram corridors upcoming...

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13 minutes ago, Adrian1 said:

Hi,

Thanks for your reply.

The main point being in my opinion that the dormant capital freeing via OLD does not amount to a lot of funds (taking MGI's example in Mexico).

Overall I was surprised by this article because I cannot identify who this guy is "rooting for", which interests he is defending. Most of the times in this space, it is obvious (bitcoin maxis, swift) but here it is not. In addition, the article is documented which, again, is not something that you see often in this space.

I am in no way saying this is a good article, but it picked my curiosity because of the above points.

I have not read this article, but part of the answer is in the interview on another thread :

 

ODL saves the difficulty of setting up Nostro accounts and expense of running them

ODL can be used by small businesses

ODL is very resilient, reliable, direct and is atomic in real time 24/7 in the FX rate of the moment of the transactions.

Big banks are likely to be very much slower at adopting ODL than new comers in the markets.  Think of how shipping lines never got involved in the airline business; this is the emerging pattern of development of ODL.  Even the senior management of Ripple did not see it coming and the way things developed and changed tack in 2019.  I think Moneygram is well suited to benefiting from ODL, but like you welcome advanced warnings of black swans if they appear on the horizon.  First impression, not having read your article, is that this is not a black swan.

 

 

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Hello and thank you for the link and your responses.

It would seem like we are still in a phase where even people who have knowledge of the remittance industry are having a hard time (or do not want to for those with vested interests) grasping the revolutionary nature Ripple solutions can have on this industry.

Another example provided in the article if I remember correctly is ODL implies 2 currency conversions (MXN to XRP, XRP to USD) whereas only one is required without ODL: is this a valid argument in your opinion or does this guy completely misses the point ?

It just seems so weird that a guy (or girl) with apparently no agenda and knowledgeable on remittance would just dismiss Ripple solutions like it's a big scam, literally. At first I was thinking he was a hidden WU or Transferwise advocate but I also found some very negative comments from him on literally the whole remittance industry (on his twitter and blog).

However, the article contains some interesting information e.g. USD-MEX is a huge and growing remittance corridor; Euronet (owner of RIA) is somewhat in conflict with MGI over the Walmart partnership etc. Interesting

 

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16 minutes ago, Adrian1 said:

Hello and thank you for the link and your responses.

It would seem like we are still in a phase where even people who have knowledge of the remittance industry are having a hard time (or do not want to for those with vested interests) grasping the revolutionary nature Ripple solutions can have on this industry.

Another example provided in the article if I remember correctly is ODL implies 2 currency conversions (MXN to XRP, XRP to USD) whereas only one is required without ODL: is this a valid argument in your opinion or does this guy completely misses the point ?

It just seems so weird that a guy (or girl) with apparently no agenda and knowledgeable on remittance would just dismiss Ripple solutions like it's a big scam, literally. At first I was thinking he was a hidden WU or Transferwise advocate but I also found some very negative comments from him on literally the whole remittance industry (on his twitter and blog).

However, the article contains some interesting information e.g. USD-MEX is a huge and growing remittance corridor; Euronet (owner of RIA) is somewhat in conflict with MGI over the Walmart partnership etc. Interesting

 

He/she might just be a sensible person and keep it in the middle. Still it's not because that's his view that he could be missing out on the potential there is. Even we do not know the potential. That potential might be smaller or bigger than we think.

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1 hour ago, Adrian1 said:

Another example provided in the article if I remember correctly is ODL implies 2 currency conversions (MXN to XRP, XRP to USD) whereas only one is required without ODL: is this a valid argument in your opinion or does this guy completely misses the point ?

This is a valid argument. I guess that the theory why the two conversions would be superior to one is that, at scale, the two conversion would be cheaper than one traditional conversion. Partly because the transaction in itself would be more efficient and therefore less costly, but also because XRP could become the central currency towards which all liquidity could be focused and thereby bring down liquidity costs (i.e. instead of having a USD <-> MXN, USD <-> EUR, USD <-> CAD, CAD <-> EUR, CAD <-> MXN, EUR <-> MXN corridor you would have USD/EUR/MXN/CAD <-> XRP, the more currencies you would add to this example the amount of reduced corridors would scale exponentially) . 

The problem with this argument is that due to today's volatility of XRP/Crypto I would expect market makers to require additional margin compared with fiat currencies. With adoption and scale, the volatility and extra margin required would certainly be reduced. But at the current situation I have a really hard time believing that Moneygram are saving money by using ODL. I'm sure he is right in his observations that Moneygram has eliminated their margin in these corridors and that they are also compensated by Ripple per transaction/volume to use ODL. Hence, ODL is not profitable for institutions in its current state

At scale, I believe the benefits of pooling liquidity of each fiat currency towards one intermediary currency on effective rails would definitely be hugely beneficial for the FX market. The big question is if XRP/Ripple will ever reach that scale.

Thank you for sharing a well written, well researched and objective article about Moneygram. It was interesting to read.

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1 hour ago, opaopa said:

This is a valid argument. I guess that the theory why the two conversions would be superior to one is that, at scale, the two conversion would be cheaper than one traditional conversion. Partly because the transaction in itself would be more efficient and therefore less costly, but also because XRP could become the central currency towards which all liquidity could be focused and thereby bring down liquidity costs (i.e. instead of having a USD <-> MXN, USD <-> EUR, USD <-> CAD, CAD <-> EUR, CAD <-> MXN, EUR <-> MXN corridor you would have USD/EUR/MXN/CAD <-> XRP, the more currencies you would add to this example the amount of reduced corridors would scale exponentially) . 

The problem with this argument is that due to today's volatility of XRP/Crypto I would expect market makers to require additional margin compared with fiat currencies. With adoption and scale, the volatility and extra margin required would certainly be reduced. But at the current situation I have a really hard time believing that Moneygram are saving money by using ODL. I'm sure he is right in his observations that Moneygram has eliminated their margin in these corridors and that they are also compensated by Ripple per transaction/volume to use ODL. Hence, ODL is not profitable for institutions in its current state

At scale, I believe the benefits of pooling liquidity of each fiat currency towards one intermediary currency on effective rails would definitely be hugely beneficial for the FX market. The big question is if XRP/Ripple will ever reach that scale.

Thank you for sharing a well written, well researched and objective article about Moneygram. It was interesting to read.

Thank you for the explanation, makes sense.

1 hour ago, codiusrex said:

@Adrian1 the OP article doesn’t draw a conclusion at all — the reader is left with a gazillion questions about the article, and not the content. FWIW, posting a cut-and-paste collage from the Internet and calling it an article doesn’t make it an article.

 

Here is the conclusion of the article:

”Conclusion

Hopefully, you found this overview helpful in developing your own point of view on the future of MoneyGram. As with all our articles, please comment below if we got anything wrong or if you have a different perspective on these events.”

 

I think you wrote this article and wanted some feedback in a vacuum but that’s just my opinion with nothing to base it on.

I did not quote the conclusion because it does not tell you anything about the article itself, it give the appearance of neutrality however the whole article is about trashing Moneygram (and Ripple along the way). And no I did not write this article.

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5 hours ago, Adrian1 said:

Hi everyone,

I am new to the chat, but have been reading it since 2017.

I have never doubted Ripple's narrative of ODL advantages over current methods for cross-border payments (faster, more reliable, feeing of nostro accounts). However, I have to admit this belief may solely be the result of the trust I have in Ripple (management team, available growth metrics etc.). In addition, I have never come across any serious rebutal or criticism of Ripple's ODL solution which was not obviously malicious.

Until I came across the following article: https://www.saveonsend.com/blog/moneygram-money-transfer/

This article, on Moneygram, completely undermines Ripple's ODL impact on Moneygram and contradicts Ripple's narrative with regards to ODL advantages (see end of the article).

I had a quick glance at the blog and it seems that (i) the owner is quite knowledgeable about remittances, and (ii) does not seem to support one actor in particular (maybe he has a broader agenda ?).

What do you guys think ?

[I know this sounds like FUD but I assure you it is not!! you have to take my word for it..]

Thank you all.

 

 

I wouldn't say it was poorly written.  It was strongly comparable to a teenagers homework like their economics teacher told them to write an essay comparing the recent ups and downs of remittance companies and there's a little blurb at the end about blockchain.  It's a bit weird that it says "posted November 3rd" at the top and yet the screenshots and rhetoric as well as the comments at the bottom are all from the middle of this year which is very strange.

Anyhoo imo this highlights that Ripple made the correct decision.  They want a company to use their product but they also want a good deal out of it.  They would get higher volume from WU but they have more leverage with Moneygram because their stock value and recent performance pre-Ripple investment was sh1tty.  Going with Moneygram gave Ripple the leverage to negotiate 10% ownership as well as implement ODL and Ripplesuite and Moneygram get their useless asses dragged into the future by Ripple who are championed by superior staff from the top down.

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It might seem like a wasteful decision for Ripple, but the company literally prints money (by creating crypto-tokens called XRP and selling them to institutions and consumers) at a speed of $250 million per quarter which has to be spent somehow.

Erm, yeah, author can't be arsed to research properly, i don't give credit to the article at all.

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9 hours ago, carpetbelly said:

Erm, yeah, author can't be arsed to research properly, i don't give credit to the article at all.

I disagree, I found the article to be quite interesting and the author clearly knows far more about the payments companies and has researched them more deeply than nearly all the people posting to this forum. His/Her flippant comment about printing xrp should be read in context and isn't so far from the truth - they have 50+billion remaining to sell that came from thin air and the money raised does need to be spent somewhere. For those of us outside the payments industry the investment into moneygram seems like a very good idea, but the author illustrates it is clearly a company with a troubled history that has failed to capitalize on potential markets and opportunities. It has taken them the best part of a decade to move to 'digital' payments (Not sure really what they mean, but it certainly doesn't bode well for rapid switchover to ODL). The author is simply concluding that ripple might actually be investing in a badly run company, but hey - why not. they have money to spare.

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13 hours ago, CaligulazBaby said:

I wouldn't say it was poorly written.  It was strongly comparable to a teenagers homework like their economics teacher told them to write an essay comparing the recent ups and downs of remittance companies and there's a little blurb at the end about blockchain.  It's a bit weird that it says "posted November 3rd" at the top and yet the screenshots and rhetoric as well as the comments at the bottom are all from the middle of this year which is very strange.

Anyhoo imo this highlights that Ripple made the correct decision.  They want a company to use their product but they also want a good deal out of it.  They would get higher volume from WU but they have more leverage with Moneygram because their stock value and recent performance pre-Ripple investment was sh1tty.  Going with Moneygram gave Ripple the leverage to negotiate 10% ownership as well as implement ODL and Ripplesuite and Moneygram get their useless asses dragged into the future by Ripple who are championed by superior staff from the top down.

I agree that this is a well researched article and well worth a read.

The only part that I disagree with is below. The volatility of XRP has been shown not to impact to the level many had feared and the two transaction costs are still going to be cheaper than using the FX conversion. All the same still fundamental to the argument:

"This means, MoneyGram has to complete two conversion in-and-out of volatile crypto incurring additional costs instead of continuing with a single and simple FX conversion:

image.thumb.png.643f42cdfbd33a2eb05af8147532651b.png

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5 hours ago, mistatee2000 said:

I agree that this is a well researched article and well worth a read.

The only part that I disagree with is below. The volatility of XRP has been shown not to impact to the level many had feared and the two transaction costs are still going to be cheaper than using the FX conversion. All the same still fundamental to the argument:

"This means, MoneyGram has to complete two conversion in-and-out of volatile crypto incurring additional costs instead of continuing with a single and simple FX conversion:

image.thumb.png.643f42cdfbd33a2eb05af8147532651b.png

We are sitting on gold....i say we all just stay quiet and buy while we can get it low.....  my opinion of course based on my own research.......so do your own research, then come let us know what you think.

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21 hours ago, opaopa said:

I guess that the theory why the two conversions would be superior to one is that, at scale, the two conversion would be cheaper than one traditional conversion.

That's an intermediate step to the final solution: holding XRP as treasury. Then using ODL to go from XRP directly to whatever currency you want on the fly. Or even just send XRP without conversion anymore.

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