In an attempt to further expand its money transfer network, MoneyGram International Inc. (MGI) announced a strategic alliance with China’s leading China Guangfa Bank (:CGB). The company will now offer its money transfer services across the 132 branches of the bank located in China.
With the addition of CGB units, the company will now offer its services through 14,000 agent locations only in China. Overall, MoneyGram has a global network of more than 284,000 agent locations in about 196 countries, which primarily include retailers, international post offices and financial institutions.
Money transfer business remains the driving force for MoneyGram, which has been spreading business across the globe through various recognized financial institutions. Recently, the company has partnered with Nova Bank in Bosnia, Banco Ganadero in Bolivia, Vietcombank in Vietnam, UnionPay in China and Advance America – an operating subsidiary of leading Mexican bank Grupo Elektra SA – to bolster its position as one of the leading money transfer companies in the world.
Meanwhile, the company is also enhancing its brand awareness by developing user-friendly payment solutions that suit the new market trends. With regard to this growth strategy, the company is making efforts to expand its cash-to-account service to other banks as well as add new online services.
Taking a step ahead, yesterday MoneyGram eased out quick money transfers in Australian dollars in China. For this, the company has encouraged branches of Bank of China, CITIC Bank and Industrial and Commercial Bank of China to dole out payments in the required currency. Over 12,000 locations of these banks have been identified so far to kick start remittance from Australia, which has about 320,000 Chinese immigrants, in to China without any exchange fee.
Furthermore, MoneyGram continues to explore new growth avenues in untested locations by incorporating latest and flexible technology that facilitates transfers through mobile phones, prepaid cards or ATMs, in order to speed up its money transfer services and enhance the remittance volumes. This growth strategy also justifies management’s guidance of 7–9% top-line growth for 2012.
The aggressive business developments are also boosting MoneyGram’s competitive edge, particularly against the steady global growth of its arch-rival Western Union Co. (WU), which recently announced its penetration into untapped markets of Myanmar through an alliance with the Myanmar Oriental Bank.
MoneyGram carries a Zacks Rank #3, which translates into a short-term Hold rating and a long-term Neutral stance.
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