As part of the arrangement, MoneyGram will test the use of Ripple’s cryptocurrency, XRP, to move funds in a faster and cheaper way.
"The inefficiencies of global payments don't just affect banks, they also affect institutions like MoneyGram," Ripple CEO Brad Garlinghouse said in a statement.
"Money transfer companies are incredibly important because they help people get money to their friends and loved ones."
Garlinghouse added that, by using Ripple's digital asset, MoneyGram would be able to move money "as quickly as information."
Ripple’s XRP also surged almost 15 percent higher to $2.22 at 9:55 a.m. ET, according to Coinmarketcap data.
XRP allows banks and payment companies to send money quickly, no matter the location. Several companies such as UBS and Santander already use Ripple’s products to enable payments. In November 2017, American Express Co also launched an instant blockchain-based payment system using Ripple.