MoneyGram 2008 Annual Report Download - page 6

Table of Contents
use our products and services on the basis of convenience or value. We primarily offer services to consumers through third-party agents,
including retail chains and independent retailers.
In 2008, the Global Funds Transfer segment had revenue of $1,043.2 million, including net securities losses of $49.4 million primarily
attributable to our money order product line. During 2008, 2007 and 2006, our international operations generated 28 percent, 21 percent
and 20 percent, respectively, of our total fee and investment revenue, and 32 percent, 29 percent and 28 percent, respectively, of our
Global Funds Transfer segment fee and investment revenue.
Our largest agent, Walmart Stores, Inc. ("Walmart"), accounted for 26 percent, 20 percent and 17 percent of our total fee and investment
revenue and 30 percent, 27 percent and 24 percent of the fee and investment revenue of our Global Funds Transfer segment in 2008, 2007
and 2006, respectively. Walmart is our only customer that accounts for more than 10 percent of our total fee and investment revenue. Our
contract with Walmart in the United States provides for the sale by Walmart of our money orders, money transfer services and real-time,
urgent bill payment services on an exclusive basis. In conjunction with our Capital Transaction, we extended the term of our agreement
with Walmart through January 2013 and agreed to certain commission increases over the term of the contract.
In 2008, pursuant to our agreement with CVS Pharmacy, Inc. ("CVS"), we completed the rollout of our money transfer and money order
services in more than 6,200 CVS locations. We also extended the term of our contract with another large agent, ACE Cash Express, Inc.
Starting in late 2008, we began to offer our money transfer and urgent bill payment services through over 2,200 advanced-function ATMs
located at 7-Eleven convenience stores in the United States. Outside of the United States, we expanded our money transfer relationship
with Canada Post, renewed our money transfer agreement with Thomas Cook in the United Kingdom and renewed our money transfer
agreement with Walmart de Mexico. We also entered into agent agreements with large banks in India and Poland. During 2008, 2007 and
2006, our 10 largest agents accounted for 42 percent, 36 percent and 34 percent, respectively, of our total fee and investment revenue and
49 percent, 49 percent and 48 percent, respectively, of the fee and investment revenue of our Global Funds Transfer segment.
We provide Global Funds Transfer products and services utilizing a variety of proprietary point-of-sale platforms. Our platforms include
AgentConnect®, which is integrated into an 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 transaction information over the telephone, entering it directly into our central data processing system. We also operate two
customer service call centers in the United States, and we contract for additional call center services in Bulgaria and the Dominican
Republic. We provide call center services 24 hours per day, 365 days per year and provide customer service in over 30 languages.
Money Transfers: During 2008, 94 percent of our Global Funds Transfer segment fee and other revenue was generated by our money
transfer services (including bill payment). Money transfers are transfers of funds between consumers from one location to another and are
used by consumers who want to transfer funds quickly, safely and efficiently to another individual. In a typical money transfer, a
consumer visits an agent location, completes a form and pays our agent the money to be transferred along with a fee for the service. 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. Once our consumer
pays our agent the money to be transferred and the service fee, our agent enters transaction data into our transaction processing system
through one of our point-of-sale platforms and we process the transaction. The transferred funds are then made available for payment to
the designated recipient at any agent location or, in select countries, via a deposit to the recipient's bank account. We pay both our "send"
and "receive" agents a commission for the transaction. In a few instances, we offer our agents a tiered commission structure, rewarding
the agent with a higher commission as the volume of its money transfer transactions increases.
We provide money transfer services through our worldwide network of agents and through Company-owned retail locations in the United
States, France and Germany. We also offer our money transfer services on the Internet via our rapidly growing MoneyGram
eMoneyTransfer service, which allows customers to use the Internet to send a money transfer using a credit card, debit card or direct
debit from a bank account. While currently available in the United States only, we intend to expand our eMoneyTransfer service
internationally.
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