MoneyGram 2009 Annual Report Download - page 5

Table of Contents
("Raphaels Bank"). In January 2010, we acquired the assets of our agent in the Netherlands, Blue Dolphin Financial Services N.V.
Finally, we sold FSMC, Inc. and continued the exit of our ACH Commerce business in 2009.
Our Business
Our global money transfer and bill payment services are our primary revenue drivers. Money transfers are transfers of funds between
consumers from one location to another. The sender pays a fee based on the amount to be transferred and the location at which the funds
are to be received. The transferred funds are made available for payment in cash to the designated recipient at any agent location. In
select countries, the designated recipient may also receive the transferred funds via a deposit to the recipient's bank account, mobile
phone account or prepaid card. We typically pay both our "send" and "receive" agents a commission for the transaction.
We provide money transfer services through our worldwide network of agents and through Company-owned retail locations in the United
States and Western Europe. We also offer our money transfer services on the Internet via our MoneyGram Online service. In Italy and the
Philippines, we also offer our money transfer services via mobile phone and intend to expand our mobile phone money transfer network.
Our primary bill payment service offering is our ExpressPayment® service, which 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 service 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 bill payment service is also
available for payments to select billers via the Internet at www.moneygram.com.
We also derive revenue through our money order and official check services. We provide money orders through retail and financial
institutions located throughout the United States and Puerto Rico, and we provide official check outsourcing services to financial
institutions across the United States. Consumers use our money orders to make bill payments or in lieu of cash or personal checks.
Official checks are used by consumers where a payee requires a check drawn on a bank and by financial institutions to pay their own
obligations.
During 2009, 2008 and 2007, our 10 largest agents accounted for 48 percent, 44 percent and 36 percent, respectively, of our total
company fee and investment revenue and 53 percent, 53 percent and 53 percent, respectively, of the fee and investment revenue of our
Global Funds Transfer segment. Walmart Stores, Inc. ("Walmart") is our only agent that accounts for more than 10 percent of our total
company fee and investment revenue. In 2009, 2008 and 2007, Walmart accounted for 29 percent, 26 percent and 20 percent,
respectively, of our total company fee and investment revenue, and 32 percent, 31 percent and 29 percent, respectively, of the fee and
investment revenue of our Global Funds Transfer segment. Our contract with Walmart in the United States provides for Walmart's sale of
our money order and money transfer services, and real-time, urgent bill payment services at its retail locations on an exclusive basis. The
term of our agreement with Walmart runs through January 2013.
Our Segments
During the fourth quarter of 2009, we revised our segment reporting to reflect changes in how we manage our business, review operating
performance and allocate resources. We now manage our business primarily through two segments: Global Funds Transfer and Financial
Paper Products. Following is a description of each segment.
Global Funds Transfer Segment
The Global Funds Transfer segment is our primary segment, providing money transfer and bill payment services to consumers, who are
often "unbanked" or "underbanked." "Unbanked consumers" are those consumers who do not have a traditional relationship with a
financial institution. "Underbanked consumers" are consumers who, while they may have a savings account with a financial institution,
do not have a checking account. Other consumers who use our services are "convenience users" and "emergency users" who may have a
checking account with a financial institution, but prefer to use our services on the basis of convenience or to make emergency payments.
We primarily offer services to consumers through third-party agents, including retail chains, independent retailers and financial
institutions.
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