MoneyGram 2009 Annual Report Download - page 7

Table of Contents
industries (also referred to as "verticals"). These industries include the credit card, mortgage, auto finance, telecommunications,
corrections, satellite, property management, prepaid card and collections industries.
Our bill payment services also enable consumers to load and reload prepaid debit cards. Consumers with any Visa ReadyLink®-enabled
prepaid card or any NetSpend® prepaid debit card can add funds to their cards at any of our United States agent locations. We also offer
our MoneyGram AccountNow® Prepaid Visa card, which participates in the Visa ReadyLink, Interlink® and Plus® networks. The card
can be used everywhere Visa is accepted and can be reloaded at any of our United States agent locations.
Our bill payment service also allows customers to make low-cost, in-person payments of non-urgent utility bills for credit to a biller,
typically within two to three days. Through our PropertyBridge service, we offer a complete bill payment solution to the property rental
industry, including the ability to electronically accept security deposits and rent payments.
Financial Paper Products Segment
Our Financial Paper Products segment provides money orders to consumers through our retail and financial institution agent locations in
the United States and Puerto Rico, and provides official check services for financial institutions in the United States.
In 2009, our Financial Paper Products segment posted revenues of $122.8 million. Since early 2008, our investment portfolio has
consisted of lower risk, highly liquid, short-term securities that produce a lower rate of return, which has resulted in lower revenues and
profit margins in our Financial Paper Products segment.
Money Orders. We generate revenue from money orders by charging per item and other fees, as well as from the investment of funds
underlying outstanding money orders, which generally remain outstanding for fewer than 10 days. We sell money orders under the
MoneyGram brand and on a private label or co-branded basis with certain of our large retail and financial institution agents in the United
States.
In 2009, we issued approximately 204.7 million money orders through our network of 61,092 agent and financial institution locations in
the United States and Puerto Rico. In 2008, we issued approximately 245.1 million money orders through our network of 73,030 agent
and financial institution locations in the United States and Puerto Rico.
Official Check Outsourcing Services. As with money orders, we generate revenue from our official check outsourcing services from per
item and other fees and from the investment of funds underlying outstanding official checks, which generally remain outstanding for
fewer than 3.5 days. In 2009, we restructured our official check business model by reducing the commissions we pay our financial
institution customers and increasing per item and other fees. As of December 31, 2009, we provide official check outsourcing services at
approximately 14,000 branch locations of more than 1,600 financial institutions. We issued 35.9 million and 42.4 million of official
checks in 2009 and 2008, respectively.
Product and Infrastructure Development and Enhancements
We focus our product development and enhancements on innovative ways to transfer money and pay bills. We continually seek to
provide our customers with added flexibility and convenience to help them meet the financial demands of their daily lives. We also invest
in our infrastructure to increase efficiencies and support our strategic initiatives.
In 2009, we began reaching new customers through alternate money transfer delivery channels. We now offer mobile phone money
transfers through key agents in the Philippines and Italy. In January 2010, we launched the MoneyGram iPhoneTM application, Mobile
Companion, allowing consumers to search for agent locations, including the agent's address, phone numbers and hours of operation.
Mobile Companion also includes the convenience of a fee estimator that allows consumers to determine the fee for a transaction in
advance.
We also introduced the convenience of cash-to-card services through key agents in the Philippines, which allows their customers to
collect remittances on a card, which can then be used to pay for purchases at participating stores.
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