MoneyGram 2008 Annual Report Download - page 7

Table of Contents
As of December 31, 2008, we offer money transfers to consumers in a choice of local currency, U.S. Dollars or Euros in 129 countries
("multi-currency"). Our multi-currency technology allows us to execute our money transfers directly between and among several
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 country, or in U.S. Dollars or Euros in certain
countries.
As of December 31, 2008, our agent network consisted of approximately 176,000 money transfer agent locations in approximately 189
countries and territories worldwide. These agent locations are in the following geographic regions: 47,500 locations in Western Europe
and the Middle East; 44,000 locations in North America; 24,600 locations in Latin America (including Mexico which represents 11,900
locations); 22,700 locations in Eastern Europe; 15,900 locations in the Indian subcontinent; 14,800 locations in Asia Pacific; and 6,500
locations in Africa. As of the date of this filing, our money transfer agent locations have grown to approximately 178,000.
We derive our money transfer revenues primarily from consumer transaction fees and revenues from currency exchange on international
money transfers. We have corridor pricing capabilities that enable us to establish different consumer fees and foreign exchange rates for
our money transfer services by location, for a broader segment such as defined zip code regions or for a widespread direct marketing area.
We strive to maintain our money transfer consumer fees at a price point below our primary competitor and above the niche players in the
market.
Money Orders: MoneyGram money orders, which are sold through our agent locations in the U.S. and Puerto Rico, can be presented by
our consumers to make a payment or for cash. In 2008, we issued approximately 232 million money orders through our network of
59,000 retail agent locations in the United States and Puerto Rico.
Our money orders are sold under the MoneyGram brand, as well as on a private label or co-branded basis with certain of our large retail
agents in the United States. In most cases, we receive transaction fees from our agents for each money order sold. In many cases, we also
receive monthly dispenser fees from our agents for the money order dispenser equipment we provide. We also earn income by investing
the funds that are remitted by our agents until the money orders are cleared through the banking system or the proceeds of unclaimed
money orders are escheated to the applicable states. Generally, a money order will remain outstanding for fewer than 10 days. We
experienced losses in our investment portfolio in 2007 and 2008, with 13 percent of the losses allocable to our money order services. In
the first quarter of 2008, we realigned our investment portfolio away from asset-backed securities into highly liquid assets to significantly
reduce the risk of deterioration in our investment portfolio. As the realigned portfolio consists of highly liquid, short-term securities that
produce a lower rate of return, our revenues and profit margins in our money order business were adversely affected.
Bill Payment Services: Our bill payment services include our ExpressPayment®, utility bill payment and electronic payment services.
Our bill payment services allow consumers to make urgent payments or pay routine bills through our network to certain creditors
("billers"). We maintain relationships with billers in key industries, including the credit card, mortgage, auto finance, telecom, satellite,
property management, prepaid and collections industries. Our bill payment services generate revenue primarily from transaction fees
charged to consumers for each bill payment transaction completed.
Our primary bill payment service offering is our ExpressPayment service, which enables a consumer to pay cash at an agent location for
bills and obtain same-day notification of credit to the consumer's account with their biller. Our consumers can also use our
ExpressPayment service to load and reload prepaid debit cards. Our ExpressPayment service is offered at all of our money transfer agent
locations in the United States and at certain agent locations in select Caribbean countries. Our ExpressPayment bill payment service is
also available for payments to select billers via the Internet at www.moneygram.com. As of December 31, 2008, we provided our
ExpressPayment bill payment services to over 2,300 billers.
Our utility bill payment service allows customers to make low-cost, in-person payments of non-urgent bills for credit to a biller typically
within two to three days. Through our PropertyBridge subsidiary, we also offer a complete bill payment solution to the property rental
industry, including the ability to electronically accept security deposits and rent payments.
Stored Value Cards: We offer consumers in the United States a MoneyGram prepaid MasterCard®. Our prepaid card is accepted at all
merchants that accept MasterCard debit cards. Cardholders can use the card at over 900,000
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