Yesterday, MoneyGram International Inc. announced its alliance with two of the leading financial service center agents, in order to expand its money transfer and bill payment opportunities across the US.
The two top service centers are Friendly Check and RiteCheck, both of which were working with a competitor of MoneyGram earlier, but have now chosen to ally with the company in May this year.
Friendly Check has added about 45 customer-focused locations across North Carolina and Virginia to the MoneyGram’s money transfer network, with a wide channel of sending money both domestically and to Mexico, Central America and Africa. Simultaneously, Friendly Check is also offering MoneyGram Express Payment and Utility Bill Payment products to accentuate itpresence.
On the flip side, RiteCheck is a leading financial service center on the east coast and has added about 12 highly-active locations in Harlem and Bronx to MoneyGram’s money transfer network, serving clients from western Africa, the Caribbean, Central America and Mexico. Since the alliance in April this year, these locations now offer MoneyGram Express Payment along with money transfer services.
Alliances with leading brands not only offer a great operating experience but also strengthen MoneyGram’s competitive advantage in the regions. Moreover, the partnerships further enhance the company’s presence in the rapidly growing immigrant market in Mexico.
After several quarters of downside due to the impact of the financial crisis and transaction volumes in Mexico are swinging to growth for MoneyGram, since the past couple of quarters. During the first quarter of 2011, transaction volume to Mexico increased 10% year over year, significantly improving from a negative growth of 11% in the prior-year quarter.
Money transfer business remains the driving force for MoneyGram. The company has been spreading its money transfer business across the globe through various recognized financial institutions. MoneyGram is working vigorously to boost its operating leverage through expense control, reduction in net securities losses and expanding its money transfer transaction volumes.
Further, the company continues to explore new growth avenues in untested locations by incorporating latest and flexible technology that facilitates transfers through mobile phones, prepaid cards or ATMs, in order to speed up its money transfer services and enhance the remittance volumes. These efforts also help to retain the company’s competitive vigour, particularly against the steady global growth of its arch-rival Western Union Co. .
Overall, although the current economic turmoil has weakened both the revenue growth and the operating leverage of MoneyGram, we believe that the company has the potential to overcome the impact of the volatile U.S. dollar against other currencies and additional losses in its investment portfolio. This will result from the revamping of the company’s capital position through the successful completion of the recapitalization program followed by a steady economic recovery.