MoneyGram Expands In India & Mexico
Yesterday, MoneyGram International Inc. (NYSE:MGI) announced the expansion of its money transfer network in Mexico and India through separate news flow. The company’s existing money transfer offering alliance with India Post has been extended to more than 650 locations across the country from the prior 100 outlets.
While India Post serves across the country through 155,000 urban and rural locations, it leaves ample scope of expansion for MoneyGram to gradually reach out to the remotest places in India. Moreover, about 50% of India’s rural areas lack a banking platform. Hence, India Post offices come in handily for remitting money from one place to the other.
In 2011, India received an estimated $53.1 billion in remittance, according to the World Bank, and is the largest global remittance market. Most of the money transfer in India is made to countries like the US, UAE, UK, Canada, Australia and Saudi Arabia. Hence, the company is in the process of evolving advanced ways of consolidating in India.
Subsequently, MoneyGram also projects to increase its operating location to 5,000 India Post offices by 2014. In this regard, both India Post and the company also intend to initiate joint marketing services to enhance knowledge about the well-equipped and secure money transfer service.
Separately, MoneyGram also announced a multi-year alliance with Latin America-based Grupo Elektra, SAB de CV to add more than 1,800 money transfer locations in Mexico. Grupo Elektra is a leading financial services company and specialty retailer.
Mexico was once considered to be a slack market for MoneyGram and had been posting declines in transaction volumes growth. However, the company’s increased marketing initiatives and spiked up momentum in the region aided MoneyGram to rebound in the past nine quarters, generating a 15% upside in the fourth quarter of 2011. The latest alliance further shores up MoneyGram’s network in Mexico by over 10%.
Money transfer business remains the driving force for MoneyGram, which has been spreading its money transfer business across the globe through various recognized financial institutions. Besides, MoneyGram 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 also plans to expand its cash-to-account service to additional banks as well as add new online services.
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. These efforts also help to retain the company’s competitive vigour, particularly against the steady global growth of its arch-rival Western Union Co. (NYSE:WU).