MoneyGram International, Inc. ( MGI Quick Quote MGI - Free Report) recently delivered solid performance in its direct-to-consumer digital business, MoneyGram Online (MGO), in January 2021. Shares of the company have gained 5% in the last two days’ trading.
In January, the company reported cross-border transaction growth of 137% year over year. The MoneyGram app, which is integrated with enhanced digital capabilities, has been driving the company’s digital business growth. Notably, the app leverages its consumer-centric nature, which enables customers to engage in money transfers across more than 200 countries and territories.
However, the cross-border business gain for January was lower than 142% year-over-year cross border transaction growth reported for December 2020 in its MGO business.
Despite January 2021 growth declined a bit from December 2020 level, it’s worthy of mentioning that the month of January in 2021 marked the 13th straight month of triple-digit cross-border transaction growth in its MGO business. The company’s digital business has been performing well for quite some time and started to grow in leaps and bounds from 2020.
Moreover, customers have reemphasized their trust on MoneyGram app. Case in point, the app transactions taking place in January have soared 161% year over year, which is surely impressive.
There is no doubt that MoneyGram's focused pursuit of a digital transformation since 2017 has started yielding results. Evidently, the company’s digital transactions have made up 30% of total money transfer transactions in January 2021, up from 28% reported in fourth-quarter 2020.
The fourth-quarter results also bear testament to the successful digital transformation journey of MoneyGram. With US MGO generating highest money transfer transactions in December, robust demand for the MoneyGram app and strong customer retention rates provided a boost to the quarterly results. As a result, digital revenues not only attained a record figure of $57.4 million for the fourth quarter, which not only improved 79% year over year but also registered a record figure of $188 million for 2020. The sound performance of the MGO business has been substantiated further in the fourth-quarter results, per which cross-border digital transactions soared 152% year over year in the company’s MGO business.
Shares of MoneyGram have soared 232.4% in a year against the
industry’s decline of 5.1%.
With the COVID-19 pandemic resulting in lockdowns and social distancing measures globally, the need to transfer money through digital to friends and families residing elsewhere became the need of the hour. MoneyGram has been able to capitalize on the current trend in the global digital payments space, courtesy of its strong digital platform. The company has undertaken technological advancements and formed several digital partnerships for upgrading its online platform. These digital tie-ups have also contributed 77% year-over-year transaction growth in the fourth quarter.
Some other companies, which are active in the digital money remittance space and have been undertaking technological investments to upgrade their services, include
The Western Union Company ( WU Quick Quote WU - Free Report) , Square, Inc. ( SQ Quick Quote SQ - Free Report) and PayPal Holdings Inc. ( PYPL Quick Quote PYPL - Free Report) .
Notably, MoneyGram carries a Zacks Rank #4 (Sell).
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