Failed and Stalled Partnerships Learning from What Didn't Work

MoneyGram was Ripple's highest-profile ODL partnership—and its most instructive failure.

MoneyGram Profile:

MONEYGRAM PARTNERSHIP

Company: MoneyGram International
Type: Global remittance company
Listed: NASDAQ (MGI)
Markets: 200+ countries
Size: ~$1.4B annual revenue (2019)
Partnership: 2019-2021
Status: ENDED

Significance:
├── Second-largest remittance company globally
├── Proved ODL could work at major institution
├── High-profile validation for XRP
├── Ending was equally high-profile setback

Detailed Timeline:

MONEYGRAM TIMELINE

June 2019: Partnership Announced
├── Ripple invests $30M equity in MoneyGram
├── MoneyGram to pilot ODL for FX settlement
├── Major validation announcement
└── XRP price response positive

Q3-Q4 2019: Implementation Begins
├── US-Mexico corridor testing
├── US-Philippines corridor testing
├── Technical integration complete
├── Initial volumes reported

2020: Scaling and Payments
├── Volumes growing
├── Ripple payments to MoneyGram for ODL usage
├── Disclosed: $9.3M (Q4 2019), $8.3M (Q1 2020)
├── Total payments: ~$50M+ over relationship
└── Economics: MoneyGram paid to use ODL

December 2020: SEC Lawsuit Filed
├── SEC sues Ripple over XRP
├── Regulatory uncertainty intensifies
├── US-based MoneyGram exposed
└── Partnership under stress

February 2021: Suspension
├── MoneyGram suspends ODL usage
├── Citing "uncertainty" from SEC lawsuit
├── Operations halted

March 2021: Partnership Ends
├── Formal relationship concluded
├── No ODL usage since
└── No indication of resumption

Failure Factor Analysis:

MONEYGRAM FAILURE FACTORS

Factor 1: Regulatory Pressure (Primary)
├── SEC lawsuit created direct risk
├── MoneyGram is US public company
├── SEC scrutiny of XRP affected MoneyGram
├── Legal team advised discontinuation
└── Weight: 40-50% of decision

Factor 2: Subsidized Economics
├── Ripple paid MoneyGram to use ODL
├── Total payments: $50M+
├── Without payments, economics unclear
├── Sustainable without subsidy? Unknown
└── Weight: 20-30% of decision

Factor 3: Public Company Exposure
├── MoneyGram stock affected by crypto association
├── Shareholder pressure on crypto involvement
├── Audit committee concerns
├── Risk/reward for public company unfavorable
└── Weight: 15-20% of decision

Factor 4: Strategic Calculus
├── Was ODL core to MoneyGram strategy? No
├── Was XRP association worth regulatory risk? No
├── Did MoneyGram need ODL to survive? No
├── When risk rose, easy to exit
└── Weight: 10-15% of decision

Critical Lessons:

Western Union was among the most anticipated potential ODL users—but never adopted.

Western Union Case:

WESTERN UNION CASE

Company: Western Union Company
Type: Global remittance leader
Listed: NYSE (WU)
Markets: 200+ countries
Size: ~$5B+ annual revenue
Partnership: Testing 2018
Status: NEVER ADOPTED

Announcement:
├── 2018: "Testing Ripple technology"
├── High-profile announcement
├── Largest remittance company potentially adopting
├── XRP community excitement high

Outcome:
├── Testing only, never production
├── Eventually ended without adoption
├── CEO publicly skeptical of cost savings
├── Never became ODL user

Decision Analysis:

WESTERN UNION NON-ADOPTION FACTORS

Factor 1: Economics Didn't Work
├── WU CEO Hikmet Ersek (2018): "It didn't save us money"
├── WU has scale and existing infrastructure
├── Traditional operations already efficient
├── ODL savings marginal or negative
└── Primary reason: No economic case

Factor 2: Existing Infrastructure
├── WU has massive nostro account network
├── Already optimized correspondent relationships
├── New system adds complexity without savings
├── Switching costs exceed benefits
└── "If it ain't broke, don't fix it"

Factor 3: Regulatory Caution
├── WU heavily regulated in many jurisdictions
├── Adding crypto = adding regulatory complexity
├── Risk tolerance low for marginal benefit
├── Compliance teams opposed
└── Not worth the regulatory overhead

Factor 4: Strategic Priority
├── WU focused on digital transformation
├── But via own app, not crypto rails
├── ODL not core to WU strategy
├── Resources better spent elsewhere
└── Crypto not on strategic roadmap

Key Takeaways:

During 2017-2018 crypto boom, Ripple announced partnerships aggressively:

2017-2018 PARTNERSHIP WAVE

Approximate Announcements: 200+
Types:
├── Major banks "joining RippleNet"
├── Regional banks "piloting Ripple"
├── Payment providers "partnering"
├── Many vague "exploration" announcements
└── Mixed quality and commitment levels

Community Reception:
├── Each announcement celebrated
├── Price often spiked on news
├── "Adoption is coming" narrative
├── Partnership count as progress metric
└── Few distinguished announcement from adoption

Follow-Up Analysis:

2017-2018 PARTNERSHIP OUTCOMES

Estimated Breakdown:
├── Still active (any level): ~40-50%
├── Stalled (no updates 3+ years): ~30-40%
├── Confirmed ended: ~10-15%
├── Unknown status: ~10-15%

By Product:
├── RippleNet messaging: Most that remained
├── ODL production: <10% of original
├── ODL at scale: <5% of original
└── Never used any Ripple product: Significant portion

Examples of Disappeared Partnerships:
├── Many small regional banks (never heard from again)
├── Payment providers (announced, then silence)
├── "Exploring" institutions (exploration ended)
└── Pilot programs (pilots concluded without production)

Common Patterns in Failed 2017-2018 Partnerships:

FAILURE PATTERNS

Pattern 1: Announcement Without Substance
├── Press release issued
├── No follow-up ever
├── No product implementation
├── Partnership was marketing, not operational
└── Indicator: Single announcement, then nothing

Pattern 2: Pilot That Ended
├── Testing announced
├── Pilot conducted
├── Results disappointing or inconclusive
├── Partnership quietly discontinued
└── Indicator: "Testing" language, then silence

Pattern 3: Leadership Change
├── Champion departed
├── New leadership had different priorities
├── Partnership deprioritized
├── Eventually ended
└── Indicator: Key personnel change, then slowdown

Pattern 4: Regulatory Retreat
├── Compliance review flagged concerns
├── Legal team advised against crypto
├── Partnership suspended or ended
├── Often not publicly announced
└── Indicator: US-based or conservative institution

Pattern 5: Strategic Pivot
├── Partner's strategy changed
├── Crypto no longer aligned
├── Resources reallocated
├── Partnership abandoned
└── Indicator: Company-wide strategy shift

Use these indicators to assess current partnership health:

WARNING SIGN CHECKLIST

Communication Indicators:
□ No updates in 12+ months
□ Decreasing frequency of mentions
□ Vague language replacing specific commitments
□ Partner no longer mentions Ripple in materials
□ Ripple no longer mentions partner prominently

Operational Indicators:
□ No corridor expansion
□ No volume growth (if disclosed)
□ Stage not progressing (pilot → production)
□ Team reductions or departures
□ Integration project "paused"

Strategic Indicators:
□ Leadership change at partner
□ Partner announces competing solution
□ Partner's strategic priorities shift
□ M&A activity affecting partner
□ Regulatory pressure on partner

External Indicators:
□ Partner faces financial difficulties
□ Regulatory action against partner
□ Market conditions affecting partner's business
□ Competitive pressure on partner's core business
□ Crypto regulatory tightening in partner's jurisdiction

Partnership Health Score:

PARTNERSHIP HEALTH ASSESSMENT

Score each factor (1-5, 5=healthy):

Communication Health:
├── Recent announcements/updates?
├── Partner mentions Ripple publicly?
├── Specific vs vague language?
└── Score: ___/5

Operational Health:
├── Stage progression visible?
├── Corridor/volume growth?
├── Team stability?
└── Score: ___/5

Strategic Health:
├── Leadership stable?
├── Strategic alignment continues?
├── No competing initiatives?
└── Score: ___/5

External Health:
├── Financial health of partner?
├── Regulatory environment stable?
├── Market position secure?
└── Score: ___/5

Total Score: ___/20
├── 16-20: Healthy
├── 11-15: Monitor closely
├── 6-10: At risk
├── 1-5: Likely stalled/ending
```

Current Partnership Risk Assessment (Examples):

SBI HOLDINGS ASSESSMENT

Communication: 5/5 (Regular updates, public advocacy)
Operational: 5/5 (Stage 5, expanding corridors)
Strategic: 5/5 (Deep strategic alignment)
External: 4/5 (Leadership age = succession risk)
Total: 19/20 - Healthy
Risk Level: Low

GENERIC "TESTING" BANK ASSESSMENT

Communication: 2/5 (Announcement 2020, no updates)
Operational: 1/5 (No evidence of production)
Strategic: 2/5 (Unknown current priority)
External: 3/5 (Neutral)
Total: 8/20 - At Risk
Risk Level: High (likely stalled)

Model Partnership Attrition:

PARTNERSHIP ATTRITION MODEL

Historical Attrition:
├── Announcement → Testing: 50% don't proceed
├── Testing → Pilot: 50% don't proceed
├── Pilot → Production: 40% don't proceed
├── Production → Scale: 20% don't proceed
└── Overall: ~85-90% attrition

Ongoing Attrition:
├── Even at scale, ~5% annual attrition
├── MoneyGram example: Scale partner can exit
├── Circumstances change over time
├── Nothing is permanent
└── Model 5-10% annual churn even at scale

Investment Model Implications:
├── Don't assume all partnerships persist
├── Include attrition in projections
├── Discount partnership counts by attrition
├── Weight pipeline by stage probability
└── Maintain margin of safety

How to Value Partnership Pipeline:

PIPELINE VALUATION FRAMEWORK

Instead of: Count all partnerships equally
Do: Weight by stage and attrition probability

Stage 1 (Announced): × 10% (90% attrition)
Stage 2 (Testing): × 25% (75% attrition)
Stage 3 (Pilot): × 50% (50% attrition)
Stage 4 (Limited Production): × 75% (25% attrition)
Stage 5 (Material Scale): × 95% (5% annual churn)

Example Calculation:
├── 50 Stage 2 partnerships × 25% = 12.5 expected survivors
├── 25 Stage 3 partnerships × 50% = 12.5 expected survivors
├── 15 Stage 4 partnerships × 75% = 11.25 expected survivors
├── 12 Stage 5 partnerships × 95% = 11.4 expected survivors
└── Total expected material-scale: ~11-12

Much more conservative than counting all 102 partnerships.

Incorporating Failure Risk:

Success Requirements (Confirmed by Failures):

SUCCESS REQUIREMENTS (Failure Evidence)

Strategic Alignment:
├── MoneyGram (transactional) → Failed
├── SBI (equity investor) → Succeeded
└── Lesson: Deep alignment required, not just customer relationship

Regulatory Resilience:
├── MoneyGram (US exposure) → Failed under SEC pressure
├── SBI (Japan clarity) → Continued through lawsuit
└── Lesson: Regulatory environment must support persistence

Independent Economics:
├── MoneyGram (subsidized) → Ended when economics questioned
├── SBI (genuine savings) → Continues without subsidy
└── Lesson: Must work without Ripple payments

Core Strategic Fit:
├── Western Union (not strategic) → Never adopted
├── SBI (fintech strategy) → Deep integration
└── Lesson: ODL must fit partner's core strategy

Partnership Success Predictor:

SUCCESS PREDICTION FORMULA

High Success Probability:
├── Strategic equity investment OR
├── Deep strategic alignment AND
├── Favorable regulatory jurisdiction AND
├── High-cost corridor target AND
├── Multi-year commitment demonstrated
└── Example: SBI Holdings ✓

Medium Success Probability:
├── Operational commitment (not equity) AND
├── Moderate regulatory clarity AND
├── Favorable corridor economics AND
├── 2+ years of progress
└── Example: Tier 2 emerging partners

Low Success Probability:
├── Announcement only OR
├── US-based without regulatory clarity OR
├── Large institution with existing infrastructure OR
├── No updates in 2+ years
└── Example: Most 2017-2018 announcements

✅ Partnership attrition is substantial — Of 300+ announcements, only 100-150 are active, and only 10-20 at material scale; ~50-70% attrition documented

✅ MoneyGram failure provides clear lessons — Regulatory pressure can end even successful implementations; subsidized adoption is fragile; public company exposure matters

✅ Testing doesn't predict adoption — Western Union tested and rejected; many 2017-2018 pilots ended without production; announcement → adoption conversion is <15%

⚠️ Exact attrition rates by stage — Estimates based on observation; precise funnel data not publicly available

⚠️ Whether current partnerships are at risk — Some partnerships showing warning signs may recover; others apparently healthy may fail

⚠️ MoneyGram-specific vs generalizable lessons — SEC lawsuit was unique circumstance; may not predict future partnership endings

🔴 Assuming all partnerships will persist — Historical evidence shows >50% don't reach or stay at production

🔴 Ignoring warning signs — Silence, stagnation, and leadership changes often precede partnership endings

🔴 Treating partnership count as progress metric — Quality and stage matter more than quantity; 10 Stage 5 > 100 Stage 1

Failures teach that ODL adoption is hard, most attempts don't succeed, and even successes can end. This isn't pessimism—it's realism that improves analytical accuracy. Investment models should incorporate attrition, weight partnerships by stage, and maintain appropriate conservatism rather than extrapolating from announcement counts.

Assignment: Create a comprehensive partnership risk assessment for active Ripple partnerships.

Requirements:

Part 1: Failure Case Studies (30%)

Write detailed case studies for:

1. MoneyGram (2,000 words)

2. Western Union (1,000 words)

3. One additional failed/stalled partnership (500 words)

Part 2: Warning Sign Identification (25%)

• Communication warning signs (5+)
• Operational warning signs (5+)
• Strategic warning signs (5+)
• External warning signs (5+)
• Scoring methodology

Part 3: Current Partnership Risk Assessment (30%)

• Score each partnership (include methodology)
• Identify highest-risk current partnerships
• Identify what would change assessment
• Monitoring recommendations for each

Part 4: Investment Model Adjustment (15%)

• Attrition rate assumptions by stage
• How to weight partnership pipeline
• Margin of safety recommendations
• Monitoring triggers for model revision

Grading Criteria:

Time investment: 5-6 hours
Value: Risk assessment skills protect against overoptimism bias

1. MoneyGram Failure Question:

What was the PRIMARY factor in MoneyGram ending its ODL partnership with Ripple?

A) ODL technology didn't work at scale
B) MoneyGram found a cheaper alternative
C) SEC lawsuit created regulatory pressure for the US-based public company
D) Ripple ended the partnership due to MoneyGram's poor performance

Correct Answer: C

Explanation: MoneyGram's ODL implementation was operationally successful—volumes were growing. The partnership ended primarily due to SEC regulatory pressure. MoneyGram, as a US-based public company, faced direct scrutiny from the SEC lawsuit filed against Ripple. Legal and compliance teams advised discontinuation to reduce regulatory risk. Other factors (subsidized economics, public company exposure) contributed but regulatory pressure was primary.

2. Western Union Question:

Western Union announced testing of Ripple technology in 2018 but never adopted ODL. What does this teach about partnership evaluation?

A) Western Union made a mistake by not adopting
B) Testing announcements don't predict adoption; economics must work independently, and large optimized players may not benefit from ODL
C) Ripple should have offered better terms
D) ODL doesn't work for remittance companies

Correct Answer: B

Explanation: Western Union's CEO publicly stated ODL "didn't save money." This teaches that testing is not commitment—partners evaluate and often reject. Large, well-optimized players with existing infrastructure may not benefit from ODL; the economics must work independently. ODL clearly works for some remittance companies (SBI Remit), but not all—fit depends on specific circumstances.

3. Attrition Rate Question:

Of 300+ partnerships announced since 2014, approximately how many are currently active at any level?

A) 250-300 (most persist)
B) 200-250 (significant persistence)
C) 100-150 (substantial attrition)
D) 50-75 (most failed)

Correct Answer: C

Explanation: Approximately 100-150 partnerships are currently active at any level (RippleNet messaging or ODL). This represents 50-70% attrition from the 300+ announced. Most 2017-2018 announcements never reached production or quietly ended. Only 10-20 partnerships are at material ODL scale. Partnership attrition is the norm, not the exception.

4. Warning Sign Question:

A partnership announced in 2020 has had no public updates since 2021, partner leadership changed in 2022, and the partner recently announced a competing internal blockchain initiative. What is the appropriate risk assessment?

A) Healthy — partnerships often operate quietly
B) Monitor — some concerning signs
C) At Risk — multiple warning signs indicate likely stalling or ending
D) Cannot assess — insufficient information

Correct Answer: C

Explanation: Multiple warning signs are present: (1) No updates in 3+ years indicates communication breakdown, (2) Leadership change suggests potential priority shift, (3) Competing initiative indicates strategic misalignment. Together, these suggest the partnership has likely stalled or ended. The pattern matches many failed 2017-2018 partnerships. At-risk classification is appropriate.

5. Investment Model Question:

An investor models XRP demand assuming all 50 Stage 2 (testing) partnerships will eventually reach Stage 5 (material scale). What is wrong with this approach?

A) Stage 2 partnerships are more valuable than Stage 5
B) Historical evidence shows only ~10-25% of Stage 2 partnerships reach Stage 5; assuming 100% conversion dramatically overstates future demand
C) Stage 2 partnerships don't matter for XRP demand
D) The number of Stage 2 partnerships is unknown

Correct Answer: B

Explanation: Historical attrition shows ~75-90% of Stage 2 partnerships never reach Stage 5. Assuming 100% conversion overstates expected demand by 4-10×. Correct approach: Weight Stage 2 at 10-25% probability (not 100%), resulting in ~5-12 expected material-scale partners, not 50. Investment models must incorporate attrition to avoid systematic overestimation.

Case Study Sources:

• MoneyGram SEC filings (2019-2021)
• Ripple press releases on MoneyGram
• Western Union CEO interview quotes on Ripple testing
• Historical Ripple partnership announcements

Analysis Resources:

• Enterprise technology adoption failure research
• Partnership lifecycle studies
• Regulatory impact on fintech partnerships

For Next Lesson:

Lesson 12 examines the distinction between announced, rumored, and speculated partnerships—teaching you to separate verified facts from community hopes and media mischaracterizations.

End of Lesson 11

Total words: ~5,600
Estimated completion time: 55 minutes reading + 5-6 hours for deliverable