MoneyGram International Inc. (MGI - Free Report) fortified its association with Mountain America, as it extended the official check processing contract. The money transfer, bill payment and check processing firm has been working with Mountain America, a credit union commissioned by the state of the U.S., for over years now.
MoneyGram will continue to process the official check for Mountain America’s banking operations. The multi-year contract extensionis expected to significantly boost the company’s financials.
Accounting for most of the financial paper products segment, MoneyGram’s official check outsourcing services and program management are facilitated through its high-tech online platform − MoneyGram PrimeLink Official Check, which is also used in this alliance.
This advanced web-based service providing solution not only eases the customer’s banking experience but also mitigates the risk of fraud by swiftly identifying any sham transactions. Given the hike in losses in the financial services industry due to fraud and money laundering, we believe that MoneyGram’s PrimeLink Official Check has a huge potential for secure and reliable money management.
Being the second largest provider of international remittances, MoneyGram intends to grow by delivering better value to its customers. While expanding its distribution channels, it aims to create new products and services and make acquisitions and strategic alliances.
Last year, MoneyGram successfully extended its 13-year working relationship with the largest agent Walmart for another 3 years, effective Apr 2013, thereby strengthening its position in the U.S. and Puerto Rico. The retaileraccounts for approximately 30% of its total revenue. We believe that expansion through organic strategies is expected to drive MoneyGram’s growth in the medium- to-long-term.
While MoneyGram faces challenges in increasing its revenues in the financial paper products segment, we believe such alliances and network expansion will support the company’s initiatives to boost the segment’s financials. Overall, led by diversified and market-compliant growth strategies, MoneyGram aims to continue achieving double-digit growth in money transfer transactions and increasing free cash flow.
While MoneyGram carries a Zacks Rank #4 (Sell), other outperformers in the financial sector include Fleetcor Tech Inc. (FLT - Free Report) , Global Indemnity Plc and Glacier Bancorp Inc. (GBCI - Free Report) . Allthese stocks carry a Zacks Rank #1 (Strong Buy).