MoneyGram 2007 Annual Report Download - page 11

Table of Contents
financial institution customers on the basis of value, service, quality, technical and operational differences, price 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.
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. Walk-in and electronic bill payment services within the Global Funds Transfer
segment of our business compete in a consumer-to-business payment industry, which includes competition from Western Union,
CheckFree Corporation, a subsidiary of Fiserv Inc. and other niche players. Additional competitors in this area include financial
institutions, third parties that host financial institution and bill 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 and bill payment services emerge allowing consumers to send and receive money in a variety of
ways, we face increasing competition. These emerging technologies include online payment service providers, mobile telephone payment
services and card-based options, such as ATM cards and stored-value cards.
The Payment Systems segment of our business competes in a concentrated industry with a small number of large competitors. Our
competitors in this segment are federal home loan banks. We also compete with financial institutions that have developed internal
processing capabilities or services similar to ours and do not outsource these services.
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 potential 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 as part of our efforts 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 (the "EU"). Countries in which we operate
may require one or more of the following:
• reporting of large cash transactions and suspicious activity;
• screening of transactions against the 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;
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