MoneyGram 2008 Annual Report Download - page 9

Table of Contents
similar amount on a daily basis from our agents and financial institutions in connection with our payment services. We move money
through a network of clearing and cash management banks, and our relationships with these clearing banks and cash management banks
are a critical component of our ability to move funds on a global and timely basis. Three banks that clear official checks for us gave
notice that they will not renew their clearing agreements when those agreements expire in mid-2009. The loss of our clearing
arrangements with these three clearing banks has not had an adverse effect on our official check business as we are moving the impacted
clearing volume to the remaining clearing banks. In the second half of 2008, one clearing bank extended their agreement with us for a
five year period and another large bank extended their agreement with us for a three year period. After the exit of the three banks in 2009,
we will have five official check clearing banks, all of which have agreed to significantly increase their clearing activity for us. We believe
these relationships provide sufficient capacity for our official check business. We rely on two banks to clear our retail money orders. We
entered into a new five-year agreement with the smaller of our two money order clearing banks in early 2009 and are in the process of
negotiating a new agreement with our primary money order clearing bank.
We also maintain contractual relationships with a variety of domestic and international cash management banks for ACH and wire
transfer services for the movement of consumer funds and agent settlements. There are a limited number of international cash
management banks with a network large enough to manage cash settlements for our entire agent base. In the first half of 2008, our current
international cash management bank informed us of its intent to terminate our relationship. This bank has indicated its willingness to
continue the relationship while we convert to our new primary international cash management banking relationship. We currently
anticipate completing this process in the first half of 2009.
Sales and Marketing
We market our products and services through a number of dedicated sales and marketing teams. In the United States, a dedicated sales
and marketing team markets our money transfer services, money orders and bill payment services to our two principal agent distribution
channels: large national chain accounts, including large retailers and financial institutions, and smaller retail chains and independent
accounts. Our retail agent base includes general merchandise, check cashing, grocery, drug and convenience store retailers and bank
locations. Dedicated sales and marketing teams also market our bill payment services directly to billers, including billers in key market
verticals, and market our official check and money order services to financial institutions. Internationally, we have sales and marketing
teams for our money transfer services located in or near the following 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. Signage remains a core focus
of building global awareness of our brand. We strive to ensure that our signs are displayed prominently at our agent locations, and that
our signage displays our brand consistently across the markets we serve. We also use traditional media methods to reach our consumers,
including television, radio and print advertising, as well as advertising our services at community and cultural events throughout the
world.
In the first quarter of 2008, we released our new global branding and our new customer loyalty program, MoneyGram Rewards®. Our
new global branding is the result of over two years of global research and differentiates MoneyGram from other payment services
providers. We developed MoneyGram Rewards to build loyalty and repeat usage with consumers around the world. The program
includes features such as a new discount structure based on a consumer's use of our services, email notifications to the sender when the
funds are picked up and a more streamlined customer service experience. Consumers can enroll for the program through our call center or
at www.mymoneygram.com. We continue to assess the effectiveness of our new global branding and MoneyGram Rewards program,
including their respective impact on our transaction volume and our global brand image and awareness.
Product and Infrastructure Development and Enhancements
Our product development activities remain focused on new ways to transfer money and pay bills through enhancements to our current
services and the development of new products and services. Recent enhancements
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