MoneyGram 2007 Annual Report Download - page 9

Table of Contents
by the lower yields in our realigned portfolio. While we expect our commission re-pricing initiatives under the official check
restructuring to substantially offset the impact of the lower yields from the realigned portfolio, we will not know the final results of the
re-pricing initiatives for some time.
Official Check Outsourcing Services: We provide official check outsourcing services through our PrimeLink® service. Financial
institutions provide official checks, which include bank checks, cashier checks, teller checks and agent checks, to consumers for use in
transactions when the payee requires a check drawn on a bank or other third party. Official checks are commonly used in consumer loan
closings, such as closings of home and car loans, and other critical situations where the payee requires assurance of payment and funds
availability. Financial institutions also use official checks to pay their own obligations. Our PrimeLinkplus® product is an internet-based
check issuance platform that allows financial institutions and other businesses with multiple locations to securely print official checks at
remote locations on a client-controlled basis, eliminating the need to overnight the checks from the main office or wire transfer the funds.
We provide PrimeLink and PrimeLinkplus at a low cost to financial institutions and pay an agreed upon commission rate on the balance
of funds underlying the official checks pending clearing of the items.
Money Orders: The Payment Systems segment also offers money orders through financial institutions in a manner very similar to the
way the services are offered through our retail agents in our Global Funds Transfer segment.
Check Processing: Through our subsidiary FSMC, Inc. ("FSMC"), we offer high volume check processing and controlled disbursement
processing. FSMC is a leading processor of promotional payments and rebates. Through FSMC, we also process checks issued under the
Special Supplemental Nutrition Program to Women, Infants and Children administered by the U.S. Department of Agriculture through
various states. Our revenues from this area are primarily derived from fees.
Clearing and Cash Management Bank Relationships
Our business involves the movement of money. On a daily basis, we move on average over $1.0 billion in cash to settle our payment
instruments and related settlements with our agents and financial institutions. We receive a similar amount on a daily basis from our
agents and financial institutions for the face amount and related fees of our payment instruments sold. We maintain contractual
relationships with 13 clearing banks around the country in order to clear the official checks issued by our PrimeLink and PrimeLinkplus
customers, as well as money orders and share drafts. These financial institutions serve as the drawee bank or payable through bank on
official check, money order and share draft items. For the clearing of money orders, we rely on one primary clearing bank. In addition,
we maintain contractual relationships with a variety of domestic and international cash management banks for ACH and wire transfer
services to process agent remittances and payments. The relationships with these clearing banks and cash management banks are a critical
component of our ability to timely move monies on a global basis.
Sales and Marketing
We market our products and services through a number of dedicated sales and marketing teams. In the United States, we have a dedicated
sales and marketing team that markets money transfer services, money orders and bill payment services on a regional basis to our two
principal agent distribution channels: large national chain accounts and smaller chains and independent accounts. The agent locations
consist of general merchandise, check cashing, grocery, drug and convenience store retailers and bank locations. We also have dedicated
sales and marketing teams that market our bill payment services directly to billers. Finally, we have a dedicated team of sales and
marketing professionals that market our PrimeLink official check services, money transfer services, PrimeLinkplus services, money
orders and ACH services to financial institutions. 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; Canada; and Mexico, Latin America and the Caribbean.
Our sales and marketing efforts continue to be supported by a wide range of consumer advertising methods. A core focus of building our
brand awareness is signage, particularly ensuring that our signs are displayed at agent locations, as well as maintaining consistency in our
signage and image globally.
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