MoneyGram 2005 Annual Report Download - page 7

Table of Contents
checks are issued under the Special Supplemental Nutrition Program to Women, Infants and Children administered by the U.S. Department of Agriculture
through the various states. FSMC, Inc. also processes other controlled disbursements, such as rebate checks. Our revenues from this area are primarily derived
from fees.
ACH Services: Pursuant to a contract with Creative Payment Solutions ("CPS"), we offer the CPS CheckTrack Re-deposited Check Entry product and
CheckMARC Remote Deposit product to financial institutions. Re-deposited Check Entry or "RCK" is the conversion of returned checks to an electronic
format for presentment and collection. Remote Deposit allows merchants to capture, balance and deliver deposits to their financial institution without making
a trip to the bank. CheckMARC supports Accounts Receivable Conversion ("ARC") through the ACH network.
Sales and Marketing
Global Funds Transfer Segment: We market our Global Funds Transfer segment products and services through a number of dedicated sales and marketing
teams. In the United States, our dedicated sales and marketing teams market money transfer services, money orders and bill payment services on a regional
basis to our three principal distribution channels: large national agent accounts, smaller, independent accounts and check cashing outlets. We also have
dedicated sales and marketing teams that market our Pay-By-Suite bill payment services, including ExpressPayment, directly to billers. Our international sales
and marketing for money transfer services is conducted by dedicated regional sales and marketing teams that are generally located in or near their regions:
Western Europe, including the United Kingdom; Eastern Europe; Asia; the Middle East; Africa; and Mexico, Latin America and the Caribbean.
We have introduced corridor pricing capabilities that enable us to establish different consumer prices for our money transfer services by defined transaction
corridors, such as narrowly defined zip code regions or widespread direct marketing areas. We are currently adding additional capabilities, including
implementing multi-currency technology that allows us to execute our money transfers directly between and among an increased number of different
currencies. Where implemented, these capabilities allow our agents to settle with us in local currency and allow consumers to know the exact amount that will
be received in the local currency of the receiving nation, or in U.S. dollars or Euros in certain countries. We also have continued to provide a more simplified
consumer fee pricing structure. Our simplified pricing structure includes reducing the number of pricing tiers or bands and allows us to manage our price-
volume dynamic while streamlining the point of sale process for our agents and consumers. Our pricing philosophy continues to be to maintain a price point
below our higher priced competitor but above the niche players in the market.
As an investment in our money transfer brand recognition, we increased our sales and marketing expenses by just over 50 percent in 2005 compared to 2004.
Our sales and marketing efforts are supported by a wide range of consumer advertising methods. We reach our consumers using traditional media such as
television, radio and print, as well as permanent signs at agent locations and street teams. The street teams consist primarily of contractors who engage in a
variety of activities including attending local ethnic festivals and events and distributing flyers and premiums introducing our products and services to
potential consumers.
Payment Systems Segment: We market our PrimeLink official check services through a dedicated team of official check sales and marketing professionals. In
addition, we have dedicated teams of sales and marketing professionals for our PrimeLinkplus product and for our sales of money order services through
banks. All marketing efforts are localized and customized to specific segments of the market. Relationship marketing is the substance of our approach to the
market. We have an intertwined network of relationships with technology providers, banks that provide marketing endorsements, banking associations,
consultants and others, including alliances with Wells Fargo, the Credit Union National Association and CPS.
Product Development and Enhancements
Our product development activities have focused on new ways to transfer money and pay bills through enhancements to our current products and the
development of new products and services. Recent enhancements and new products supplement our Global Funds Transfer segment. We believe these new
features and products will provide customers with added flexibility and convenience to help meet their financial services needs.
Product Enhancements: In March 2004, we launched our MoneyGram eMoney Transfer service that allows online money transfers and bill payments
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