Fortifying its money transfer network in Italy, MoneyGram International Inc. (MGI - Free Report) inked a strategic alliance with the country’s postal service provider − Poste Italiane (Italian Post Office). The association will add 9,000 locations to the company’s over 327,000 global agent network in over 200 countries.
The Italian Post Office is the backbone of Italy’s financial and letters-mailing system, connecting to over 37 million clients via 9,000 offices across the country. It offers regular postal services as well as related financial, insurance and mobile telephony services to individuals and organizations, reaching out to the remotest of unbanked or under-banked areas.
MoneyGram is in the process of evolving advanced ways of consolidating its operations in Italy. The country’s remittance market was worth €6.8 billion in 2012 and is expected to grow rapidly, according to statistics delivered by the national bank of Italy – Banca d’Italia (Bank of Italy). The rising number of immigrants and citizens, who send money to and from countries like China, Philippines, Romania, Senegal, Morocco, Poland, India and Albania are only projected to grow higher, going ahead.
Post offices across the globe have become a strong platform for money transfer, pensions, savings and other basic banking services. Hence, MoneyGram has been able to tap even the rural and undeveloped markets of countries such as Uganda, Tanzania, Pakistan, India, South Africa, Canada, UK and Kazakhstan, among others, by allying with various their national post offices over the past few years.
We believe such alliances will not only boost MoneyGram’s leading global market position but will also accelerate its organic growth by boosting its money transfer business. Simultaneously, these efforts will also enhance demand for global remittances and boost the company’s brand value.
While MoneyGram carries a Zacks Rank #4 (Sell), strong peer Fleetcor Tech Inc. (FLT - Free Report) holds a Zacks Rank #1 (Strong Buy). Other outperformers of the financial sector include CIT Group Inc. (CIT - Free Report) and Global Cash Access Holdings Inc. , both of which carry a Zacks Rank #2 (Buy).