MoneyGram 2013 Annual Report Download - page 5

Table of Contents
PART I
Item 1. BUSINESS
Overview
MoneyGram International, Inc. (together with our subsidiaries, “MoneyGram,” the “Company,” “we,” “us” and “our”)
is a leading global money
transfer and payment services company. We provide affordable, reliable and convenient money transfer and payment services. Our primary
consumers are persons who may not be fully served by other financial institutions, which we refer to as unbanked or underbanked consumers.
Unbanked consumers do not have a relationship with a traditional financial institution. Underbanked consumers are not fully served by
traditional financial institutions. The World Bank, a key source of industry analysis for developing countries, estimates that roughly half of the
world's adult population, or 2.5 billion people, are unbanked or underbanked. As an alternative financial services provider, we provide these
consumers with flexibility and convenience to help them meet the financial demands of their daily lives. Other consumers who use our services
are convenience users and emergency users who may utilize traditional banking services, but prefer to use our services based on convenience,
cost or to make urgent payments or transfers.
Our products include global money transfers, bill payment services, money order services and official check processing. Our global money
transfer and bill payment services are our primary revenue drivers. Money transfers are movements of funds between consumers from the
origination or "send" location and the designated "receive" locations. We also derive revenue from the sale of our money order and official check
products and generate revenue from the investment of funds underlying outstanding official checks and money orders.
Our money transfer services enable our consumers to send and receive funds worldwide through our extensive global network of agent locations
and Company-owned retail locations. Our agent locations have more than doubled since 2007 to approximately 336,000
locations, located in
more than 200
countries and territories. We operate one primary customer care center in the U.S., with regional support centers providing
ancillary services and additional call center services in various countries. We provide call center services 24 hours per day, 365 days per year and
provide customer service in 27 languages.
The MoneyGram
®
brand is recognized throughout the world. We use various trademarks and service marks in our business, including but not
limited to MoneyGram, the Globe design logo, MoneyGram Bringing You Closer, ExpressPayment, MoneyGram xpress
, Moneygrado,
FormFree, AgentWorks, Agent Connect, Delta and PrimeLink, some of which are registered in the U.S. and other countries. This document also
contains trademarks and service marks of other businesses that are the property of their respective holders and are used herein solely for
identification purposes. We have omitted the
®
and
TM
designations, as applicable, for the trademarks we reference.
The Company utilizes specific terms as related to our business throughout this document, including the following:
Corridor —
With regard to a money transfer transaction, a corridor is referred to as the originating "send" location and the designated "receive"
location. Transactions and the related fee and other revenue are viewed as originating from the "send side" of a transaction.
Corridor mix —
The relative impact of consumers completing increased or decreased transactions in each available corridor versus the
comparative prior period.
Face value — The principal amount of each completed transaction, excluding any fees related to the transaction.
Foreign currency —
The impact of foreign currency exchange rate fluctuations is typically calculated as the difference between current period
activity translated using the current period’s currency exchange rates and the comparable prior-year period’
s currency exchange rates. We use
this method to calculate the impact of changes in foreign currency exchange rates for all countries where the functional currency is not the U.S.
dollar.
History and Development
We conduct our business primarily through our wholly owned subsidiary MoneyGram Payment Systems, Inc., or MPSI, under the MoneyGram
brand. The Company was incorporated in Delaware on December 18, 2003 in connection with the June 30, 2004 spin-
off from our former parent
company, Viad Corporation. Through the Company's predecessors, we have been in operation for over 70 years. Our principal executive offices
are located at 2828 N. Harwood Street, Suite 1500, Dallas, Texas 75201 and our telephone number is [phone]
. Our website address is
www.moneygram.com .
In March 2008, we completed a recapitalization pursuant to which we received an infusion of $1.5 billion of gross equity and debt capital,
referred to herein as the 2008 Recapitalization. The equity component consisted of the sale to affiliates of Thomas H. Lee
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