MoneyGram 2006 Annual Report Download - page 9

Table of Contents
and financial incentives paid to agents once they have entered into an agreement. In turn, we compete for consumers on the basis of
number and location of outlets, price, convenience and technology.
Money transfer, money order and walk-in bill payment services within the Global Funds Transfer segment of our business compete in a
concentrated industry, with a small number of large competitors and a large number of small, niche competitors. Our primary competition
in Global Funds Transfer comes from The Western Union Company ("Western Union"), a former subsidiary of First Data Corporation,
which has greater transaction volume, a larger agent base, a more established brand name and greater financial and marketing resources
than we do. Other competitors in this segment are other providers of money transfer services, such as banks and niche person-to-person
money transfer service providers that serve select send and receive corridors, and other providers of money orders, including the
U.S. Postal Service and a subsidiary of First Data Corporation. The electronic bill payment services within the Global Funds Transfer
segment of our business compete in a highly fragmented consumer-to-business payment industry. Competitors in the electronic payments
area include financial institutions, third parties that host financial institution and biller payment services, third parties that offer payment
services directly to consumers and billers offering their own bill payment services.
As new technologies for money transfer emerge allowing consumers to send and receive money in a variety of ways, we face increasing
competition. These emerging technologies include mail and commercial courier services, online money transfer providers, and card-based
options, such as ATM cards and stored-value cards.
Regulation
Compliance with legal requirements and government regulations is a highly complex and integral part of our day-to-day operations. Our
operations are subject to a wide range of laws and regulations, both in the United States and abroad. These laws and regulations include
international, federal and state anti-money laundering laws and regulations; money transfer and payment instrument licensing laws,
escheat laws, laws covering consumer privacy, data protection and information security and consumer disclosure and consumer
protection laws.
If we were to fail to comply with any applicable laws and regulations, this failure could result in restrictions on our ability to provide our
products and services, as well as the imposition of civil fines and possibly criminal penalties. See "Risk Factors." We have added
compliance managers and employees to our compliance team around the world to ensure compliance with regulations of specific
countries and regions. We have developed and are constantly enhancing our global compliance program to stay current with the most
recent legal and regulatory changes.
Anti-Money Laundering Compliance: Compliance with money transfer regulations, including but not limited to anti-money laundering
laws and regulations, is a primary focus. Our money transfer services are subject to anti-money laundering laws and regulations of the
United States, including the Bank Secrecy Act, as amended by the USA PATRIOT Act, as well as the anti-money laundering laws and
regulations in many of the countries in which we operate, particularly in the European Union. Countries in which we operate may require
one or more of the following:
• reporting of large cash transactions and suspicious activity and screening of transactions against the various governments' watch-
lists, including but not limited to, the watch list maintained by the US Treasury Departments' Office of Foreign Assets Control
("OFAC");
• prohibition of transactions in, to or from certain countries, governments, individuals and entities;
• limitations on amounts that may be transferred by a consumer or from a jurisdiction at any one time, or over specified periods of
time;
• consumer information gathering and reporting requirements;
• consumer disclosure requirements, including language requirements and foreign currency restrictions;
• notification requirements as to the identity of contracting agents, governmental approval of contracting agents and/or requirements
and limitations on contract terms with our agents; and
• registration or licensing of the Company and/or our agents with a state agent in the US or with the central bank or other proper
authority in a country.
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