MoneyGram Spreads Out in India - Analyst Blog

Expanding its presence in India for over a decade, on December 15, MoneyGram International Inc. (MGI) announced the addition of 4,200 locations in India through alliances with the country's premier nationalized banks such as Bank of Baroda, Axis Bank and Vijaya Bank. By virtue of these alliances, MoneyGram now enjoys a strong money transfer network of 30,000 locations through 26 banks across India.

The expansion of the money transfer network is an attempt to tap the leading and rapidly developing $50 billion Indian market, the world's largest remittance country, according to the World Bank. In 2010 alone, the company added 5,726 agent Indian locations to its network. Further, through this alliance, MoneyGram has grown its network to more than 207,000 agent locations in 190 countries and territories.

Accordingly, MoneyGram has partnered with Bank of Baroda to offer its money transfer services to 2,000 key Indian locations of the bank. This bank is well established in 26 countries. On the other hand, the partnership with Axis Bank has expanded MoneyGram services to 1,100 new locations in rural and urban areas, thereby catering to customer needs across the nation.

Further, the alliance with Vijaya Bank has helped MoneyGram launch its services throughout 1,100 branch locations. This bank, along with Bank of Baroda, has joined MoneyGram's agent network under super-agent UAE Exchange, while Axis Bank is a sub-agent of UAE Exchange.

MoneyGram's existence in India provides remittance facilities to more than 25 million non-resident Indians, and hence, the company has opened its regional offices in Mumbai and Delhi. Strengthening its presence in the country, MoneyGram has recently tied up with the International Cricket Council (ICC) for a 5-year alliance, which also makes the company the official money transfer provider of all ICC cricket matches beginning with the World Cup in 2011.

Money transfer business remains the driving force for MoneyGram. The company has been expanding its money transfer business across the globe through various recognized financial institutions.

Besides, MoneyGram continues to explore new growth avenues in untested locations by incorporating latest and flexible technology such as transfers through mobile phones, prepaid cards or ATMs, in order to speed up its money transfer services and enhance remittance volumes. These efforts also help to keep up the company's competitive vigor, particularly against the steady global ramp of its arch-rival Western Union Co. (WU).

Although the current economic turmoil has weakened both the revenue growth and the operating leverage of MoneyGram, we believe that the company has the potential to overcome the impact of the volatile U.S. dollar against other currencies and additional losses in its investment portfolio, once the global economy rebounds to its historical highs.

 
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