MoneyGram 2013 Annual Report Download - page 36

Table of Contents
In 2012 , bill payment fee and other revenue decreased six percent and transactions declined three percent. Excluding the 2011
PropertyBridge
divestiture, fee and other revenue decreased one percent and transactions grew five percent. The divestiture accounted for $5.1 million
of the
decline. Excluding the divestiture, volume growth accounted for an increase of $4.6 million , which was offset by a $6.0 million
decline related
to the lower average fees from changes in industry mix.
Global Funds Transfer Fee and Other Commissions Expense
The following table details the changes in fee and other commissions for the Global Funds Transfer segment from the respective prior year for
the years ended December 31 :
In 2013 , the Global Funds Transfer commission expense increased 13 percent , or $79.3 million
. The increase in commission expense was
primarily driven by transaction growth from the money transfer product, changes in the corridor and agent mix, the movement in foreign
currency exchange rates, a step-
up in the commission rate for a large agent and increased signing bonus amortization from our agent expansion
and retention efforts, which was partially offset the transaction declines from the bill payment product.
In 2012 , the Global Funds Transfer commission expense increased 10 percent , or $51.9 million
. The increase in commission expense was
primarily the result of the transaction growth from the money transfer product. Also contributing to the increases were changes in the corridor
and agent mix and the increased signing bonus amortization from our agent expansion and retention efforts, which was partially offset by the
transaction declines from the bill payment product and movement in foreign currency exchange rates.
Financial Paper Products Fee and Other Revenue and Fee and Other Commissions Expense
The following discussion provides a summary of fee and other revenue and fee and other commissions expense for the Financial Paper Product
segment for the years ended December 31 . Investment revenue is not included in the analysis below. See " Investment Revenue Analysis
" for
additional information.
Money order fee and other revenue decreased in 2013 and 2012 due to transaction declines of nine percent and five percent
, respectively,
primarily due to attrition of agents and the continued migration by consumers to other payment methods. Official check fee and other revenue
decreased in 2013 and 2012 due to the attrition of official check financial institutions. Fee and other commissions expense decreased by
40
percent and 25 percent in 2013 and 2012 , respectively, due primarily to lower volumes.
34
(Amounts in millions) 2013
2012
Global Funds Transfer commissions expense for the prior year
$
597.6
$
545.7
Change resulting from:
Money transfer volume growth
60.6
49.0
Money transfer commission rates
7.6
16.4
Bill payment volumes
(1.6
)
(3.9
)
Bill payment commission rates
1.0
(1.2
)
Signing bonus amortization
8.9
1.2
Foreign currency exchange rate
2.8
(9.4
)
Other
—
(
0.2
)
Global Funds Transfer commissions expense
$
676.9
$
597.6
(Amounts in millions) 2013
2012 2011
2013 vs
2012
2012 vs
2011
Money order:
Fee and other revenue
$
51.1
$
55.4
$
57.3
(8
)%
(3
)%
Official check:
Fee and other revenue
16.2
18.3
21.1
(11
)%
(13
)%
Total Financial Paper Products:
Fee and other revenue
$
67.3
$
73.7
$
78.4
(9
)%
(6
)%
Fee and other commissions expense
$
0.9
$
1.5
$
2.0
(40
)%
(25
)%