MoneyGram 2005 Annual Report Download - page 5

Table of Contents
19 percent and 14 percent of the revenue of our Global Funds Transfer segment in 2005 and 2004, respectively. In 2005, Global Funds Transfer segment
revenue was $649.6 million and operating income was $121.7 million. A significant portion of Global Funds Transfer segment revenue is generated by our
money transfer product. During 2005 and 2004, our international operations generated 19 percent and 18 percent, respectively, of our total revenue and 28
percent of our Global Funds Transfer segment revenue. See Note 17 of the Notes to Consolidated Financial Statements for revenue by product and geographic
area.
We provide Global Funds Transfer products and services utilizing a variety of proprietary point-of-sale platforms. We also operate two customer service call
centers in the United States and contract for additional call center services in Bulgaria. These call centers provide multi-lingual customer service for both
agents and consumers 24 hours per day, 365 days per year.
MoneyGram Money Transfers: Money transfers are transfers of funds between consumers from one location to another. Money transfers are used by
consumers who want to transfer funds quickly, safely and efficiently to another individual within the United States or internationally. As of December 31,
2005, we provide money transfer services through over 89,000 money transfer agent locations in approximately 170 countries and territories worldwide.
These agent locations are located in the following geographic regions: 28,000 locations in North America; 14,000 locations in Latin America (including
Mexico); 30,000 locations in Western Europe and the Middle East; 8,600 locations in Asia Pacific; 5,200 locations in Eastern Europe; and 3,200 locations in
Africa.
Our money transfer revenues are derived primarily from consumer transaction fees and revenues from currency exchange on international money transfers. In
a typical money transfer, a consumer goes to an agent location, completes a form and pays the agent the money to be transferred, together with a fee. The
agent enters the transaction data into a point-of-sale money transfer platform, which connects to our central data processing system. Our platforms include
AgentConnect®, which is integrated onto the agent's point-of-sale system, and DeltaWorks® and Delta T3®, which are separate software and stand-alone
device platforms. Through our FormFree service, customers may contact our call center and a representative will collect the information over the telephone
and enter it directly into our central data processing system. The funds are made available for payment in various currencies throughout our agent network.
The fee paid by the sender is based on the amount to be transferred and the location at which the funds are to be received. Both the "send" and "receive"
agents receive a commission from the transaction. In March 2004, we launched our MoneyGram eMoney Transfer service that also allows customers to
conduct money transfer transactions on the internet at www.emoneygram.com using a credit card or a debit from a bank account. At December 31, 2005, we
offer this service only to U.S. residents outside the State of California.
Money Orders: Money orders, much like checks, can be presented by the consumer to make a payment or for cash. Our Global Funds Transfer segment has its
roots in the sale of money orders, a business we have been engaged in since 1940. Based on the number of money orders issued in 2005, we are the nation's
leading issuer of money orders. In 2005, we issued approximately 273.3 million money orders through our network of almost 53,000 retail agent locations in
the United States and Puerto Rico.
Our money orders are sold under the Travelers Express brand, which is being transitioned to the MoneyGram brand following the merger of Travelers into
MPSI, and are also sold on a private label basis or co-branded with retail agents. In most cases, we receive transaction fees from our agents for each money
order sold. In many cases, we receive additional monthly dispenser service fees from our agents for the money order dispenser equipment we provide.
Furthermore, we generate income from the investment of funds that are remitted from our agents and which we invest until the money orders are cleared
through the banking system, or are escheated to the applicable states. Generally a money order will remain outstanding for fewer than ten days.
Pay-By-SuiteSMBill Payment Services: Our bill payment services allow consumers to make urgent payments or pay routine bills. The acquisition of ACH
processing capabilities in 2005 will allow us to enhance our bill payment business and create a multi-faceted, full-cycle service. The bill payment suite of
services, referred to as Pay-By-Suite, will provide our consumer and corporate customers with a full spectrum of payment choices, completing the bill
payment cycle from payment origination to reporting and reconciliation starting in 2006.
We contract with creditors, or "billers," to enable convenience payers, just-in-time payers and delinquent debtors to pay bills through our network. A biller
may afford debtors a variety of payment methods 2