Fortifying its roots in Malaysia, MoneyGram International Inc. (MGI) has added the leading remittance company – Merchantrade – in an attempt to boost its money transfer services across the country.
Per the agreement, MoneyGram will be offering its basic money transfer services and will soon be able to utilize Merchantrade’s online remittance service. This will enable MoneyGram to transfer money easily via online means, and thus progressively cover more of the market share. The idea is to add value to the business by giving MoneyGram customers access to convenient and varied money transfer options.
Malaysia has always been one of the active operational grounds for MoneyGram. Particularly, since the last few years, the company has expanded its base in the country by inking strategic money transfer alliances. This included the incursion of more than 400 CIMB Islamic Bank branch locations throughout Malaysia in 2012.
Earlier in 2011, MoneyGram boosted its functions in over 600 locations with the leading Maybank and other non-bank agents such as International Money Express, Prabu Money Transfer, SMJ and EZ Money Express. Such global alliances have helped to extend the elasticity of remittance to any of the 190 countries under MoneyGram’s network coverage.
Growth prospects for MoneyGram is also validated by the World Bank, who estimated Malaysia’s remittance market to be worth $7 billion in 2011, marking it as the sixth largest nation in the list of top 10 send countries.
The global money transfer industry saw over $400 billion worth of opportunities in 2011 itself. Hence, we believe that the rising number of immigrants amplify the money remittance provisions, thereby opening ample avenues of growth for MoneyGram in future too.
Moreover, the scope of growth also justifies the company’s robust network accretion so far in 2013. While the company added DenizBank in Turkey last week, it also entered into money transfer alliances in the unexplored markets of Myanmar, Bangladesh, Romania and Fuji last month.
While MoneyGram carries a Zacks Rank #4 (Sell), strong peer Fleetcor Tech Inc. (FLT) holds a Zacks Rank #1 (Strong Buy). Other outperformers of the financial services sector include Financial Engines Inc. (FNGN) and Global Cash Access Holdings Inc. (GCA), each of which carry a Zacks Rank #2 (Buy).