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MoneyGram (MGI) to Offer Mobile Service in Ghana With Zeepay

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MoneyGram International Inc. (MGI - Free Report) has partnered with Zeepay, a mobile financial services company to let worldwide customers send money directly to more than 11 million mobile wallets in Ghana.

MoneyGram will be the second company  to provide money transfer service in Ghana, the first being Western Union Co. (WU - Free Report) in partnership with FBNBank Ghana Limited. MoneyGram will offer consumers three different options to pick up their funds — at a physical location, directly to a bank account or a mobile wallet — from over 200 countries around the world.

With this new service, residents at Ghana can receive funds from MoneyGram's thousands of locations in 200 countries and territories around the world into mobile wallets in minutes. The remitted money will have access 24/7 and the same can be used instantly for purchasing goods and services online. The receiver also has another option to draw money in cash from more than 2,000 banking partners' locations across the country. They can also have it debited into a bank account.

Ghana looks an attractive market with great potential for growth. According to the World Bank, in 2017, $2.2 billion flowed into Ghana, mainly from the United States ($585 million), Nigeria ($395 million), the United Kingdom ($286 million), Italy ($145 million) and Germany ($115 million).

Moreover, the mobile service should be a huge success given the high usage of the device in the region. A recent report on the Ghanaian Mobile Sector by Africa’s leading e-commerce company, Jumia, has revealed that Ghana is one of Africa’s largest mobile markets, with about 34.57 million subscribers and a penetration rate of 119%.

The report further revealed that there are 10.11 million active Internet users in that country, meaning nearly one-third of its population This is just the beginning, since management at Zeepay has plans to roll out similar services in other African countries.

MoneyGram has been taking several efforts via investment in technology and forging out alliances to seek top-line growth, which has been declining for the past many quarters.  

Year to date, the stock has lost 56%, vastly underperforming the industry’s decline of 13.8%.

Since the past 20 days, the company has announced a number of initiatives. These include expansion of digital footprint across Europe, strengthening partnership with GCash in Philippines and rolling out of money transfer service at OXXO stores in Mexico.

We believe these initiatives bode well for MoneyGram, which is facing huge competition from a number of fintech startups that are thronging the payments industry and offering cost effective and efficient service via their digital platform.

MoneyGram carries a Zacks Rank #2 (Buy). Other stocks worth considering are Cardtronics plc (CATM - Free Report) and WEX Inc. (WEX - Free Report) .

Cardtronics plc provides automated consumer financial services through its network of automated teller machines and multi-function financial services kiosks. Sporting a Zacks Rank #1 (Strong Buy,) the company came up with an average four-quarter beat of 27.17%.

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

WEX provides corporate card payment solutions in North and South America, the Asia Pacific as well as Europe. The company has a Zacks Rank of 2 and managed to deliver an average trailing four-quarter earnings surprise of 2.56%.

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