In an effort to move a step closer to providing its customers’ assistance at times of distress, Moneygram International Inc. (MGI - Free Report) and UnionPay recently signed an agreement in China.
Per the agreement, MoneyGram will provide “emergency cash services” to the credit card cardholders of UnionPay under the circumstances of the card not working or being stolen or misplaced. The company is liable to provide assistance up to $5,000.
284,000 of MoneyGram’s locations will be accessible to the credit card cardholders of UnionPay so that they can receive the money. Also, the cardholders need to register with the services of MoneyGram. The services will be made available by the company in systematic phases.
Currently, MoneyGram is entering into numerous partnerships, renewing previous contracts and signing agreements to expand the reach of its money transfer services on a wider scale. Recently, MoneyGram renewed its contract with Vietcombank and signed an agreement with Banco Ganadero.
These initiatives have been driving its shares upward. To date, it has gained 7.1% (or $1.06) since the beginning of the third quarter, to close at $16.08 yesterday.
The company is focused on growing its money transfer business by bringing in more customers to use this self-service facility. Overall, MoneyGram has a global network of more than 267,000 agent locations covering about 192 countries, which primarily include retailers, international post offices and financial institutions. The service enables a customer to transfer any amount of money from across the world in minutes. It operates around the clock.
Western Union Co. (WU - Free Report) , MoneyGram’s closest competitor, has been equally proactive on these lines and is posing a stiff competition to MoneyGram. The shares of Western Union have been increasing at a constant rate as well. Its shares too have gained 2.5% (or 43 cents) since the beginning of the third quarter to close at $17.43 yesterday.
Both companies hold a Zacks #3 Rank that translates into a short-term Hold rating. We also have a long-term Neutral recommendation on the shares of both MoneyGram and Western Union.