MoneyGram 2010 Annual Report Download - page 8

Table of Contents
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 U.S. 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 U.S. agent locations. Our bill payment services also allow
customers to make low-cost, in-person payments of non-urgent utility bills for credit to a biller, typically within two to three days.
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 2010, our Financial Paper Products segment generated revenues of $109.5 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 ten 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 2010, we issued approximately 174.2 million money orders through our network of 57,308 agent and financial institution locations in
the United States and Puerto Rico. 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.
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 3.8 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, 2010, we provide official check outsourcing services at
approximately 12,000 branch locations of more than 1,400 financial institutions. We issued 30.3 million and 35.9 million official checks
in 2010 and 2009, 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 our money transfer
services on the Internet via our MoneyGram Online service in the United States and through agent websites in Italy, Saudi Arabia and
Japan. In Italy, Abu Dhabi and the Philippines, we also offer our money transfer services via mobile phone and continue to enhance our
money transfer services to consumers through the addition of kiosks, ATM's, receive cards and direct-to-bank account products in various
markets. 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. In 2010, 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.
We have made enhancements to our MoneyGram Online service and will continue to make further enhancements to provide a better
consumer experience and efficiency in completing a transaction for our online customers, as well as more cost-effective transaction
processing. We also enhanced our MoneyGram rewards program, and now offer members the ability to receive a text message on their
mobile phones informing them that the funds they transferred have been picked up by their receiver.
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