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Euronet (EEFT) Unit to Ease Fund Transfer in Emerging Markets

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Euronet Worldwide, Inc.’s (EEFT - Free Report) subsidiary Ria Money Transfer recently collaborated with Thunes, in a bid to help several mobile wallet users and bank account holders of key emerging markets to engage in digital money transfer services worldwide.

Notably, Thunes’ real-time platform facilitates seamless cross-border transactions for mobile wallet providers, banks, technology companies and money transfer operators in emerging markets.

Further, the tie-up is likely to benefit Ria in several ways. Firstly, its extensive customer base will expand through inclusion of more than 100 million mobile money users.

Secondly, the company, which has been a global leader in the remittance industry, operates across over 160 countries via a network of more than 435,000 locations. The latest move is in sync with the company’s endeavors to extend presence across the emerging markets of Asia, Africa, and LATAM. In fact, Thunes will suitably supplement Ria’s initiatives, as the former has linked mobile money operators and banks for money transfer services in 60 currencies across more than 100 countries.

Thirdly, the latest partnership reflects Ria’s efforts to ramp up its digital services for rolling out enhanced payment solutions, as mobile money and alternative payment solutions seem to be in demand among the emerging markets. Thunes also seems to complement this endeavor of Ria, as Thunes’ Application Programming Interface (API)-backed platform enables real-time processing of cross-border payments.

Moreover, the latest move bodes well as it has been announced at a time when digital transactions have been gaining momentum globally and the COVID-19 pandemic only accelerated the trend. This trend is likely to sustain even beyond the pandemic.

Furthermore, remittances are considered the lifeline for a large number of people staying abroad. It is worth mentioning that this partnership amid an ongoing global crisis is a boon for those who need to send funds to their families for daily sustenance.

We believe that the growing popularity of contactless payments and the rising adoption of digital transactions worldwide are likely to position Euronet well for long-term growth. Euronet’s Money Transfer Segment has consistently delivered growth on the back of physical and digital distribution channels, acquisitions, etc. This is evident from a CAGR of 13% during the 2015-2019 period. The segment remains well poised for growth on the back of frequent money transfers, and growth in the foreign agent and correspondent payout networks.

Shares of Euronet have lost 34.2% in a year compared with the industry’s decline of 7.1%.

The price performance does not look impressive when compared to the price movements of other stocks in the same space, namely Square Inc. (SQ - Free Report) , PayPal Holdings Inc. (PYPL - Free Report) and MoneyGram International Inc. , which have gained 215.7%, 107.4% and 12.4%, respectively, in a year.

Euronet carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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