MoneyGram opens to the crypto space. Through a partnership with Coinme, the company enables its customers to deposit and withdraw Bitcoin in its branches.
After PayPal, MoneyGram will now also offer its customers the option of buying Bitcoin. That goes from a Press release of the company. Accordingly, the transfer service provider is teaming up with Coinme in order to be able to offer Bitcoin in over 12,000 stores. Coinme is the largest crypto-to-cash exchange in the US. In future, customers should be able to buy and sell the cryptocurrency in branches as well as in Spätis and other partner shops. The service will initially be activated in the United States and will also be available on the international market later this year.
MoneyGram CEO Alex Holmes is delighted with the new partnership:
This innovative partnership opens our business to a whole new customer segment as we are the first to pioneer a crypto-to-cash model. Together with Coinme we are building a bridge to connect Bitcoin to the local fiat currency. Our unique global network is an incredibly valuable asset. We are excited to open our platform to Coinme as we increasingly seek new growth by monetizing our network for new use cases.
Alex Holmes, MoneyGram CEO.
MoneyGram’s business model is at risk
The integration of Bitcoin opens up a new clientele for MoneyGram and thus new opportunities to grow as a company. At the same time, however, the step also harbors dangers for the financial service provider, with whom MoneyGram could destroy its own business model. Because the company’s fees are high, depending on where you send money.
For example, a transfer of 100 euros from Germany to Ghana costs almost 7 euros. For comparison: loud Fee table Binance pays 0.1 percent fees for a transaction below 50 BTC. An equivalent transaction would cost just 10 cents. It is therefore entirely justified to ask why people should continue to send money to family members abroad via MoneyGram if they could make the same amount with a Bitcoin transaction with lower transaction fees at the same time. Practice in Africa shows it. In addition, you bypass the risk of inflation with BTC transfers.
These considerations are currently far from reality. Just in case, MoneyGram should consider to what extent their business concept could not become obsolete through the Bitcoin integration.