MoneyGram 2013 Annual Report Download - page 7

Table of Contents
Business Acquisitions
— During 2013 , the Company acquired Nexxo Financial's full-
service money transfer kiosk business, which consists of
approximately 200 kiosks primarily located in California, Illinois and Texas. These kiosks offer automated, self-
service money transfers to
MoneyGram agents worldwide. Consumers will also be able to pay bills through these kiosks utilizing MoneyGram's extensive bill payment
network. Additionally, the Company completed the acquisitions of Advanced ChronoCash Services S.A., referred to herein as ChronoCash,
located in Athens, Greece, MoneyGlobe Payment Institution S.A., referred to herein as MoneyGlobe, located in Athens, Greece and the assets of
Latino Services located in Atlanta, Georgia. The ChronoCash acquisition establishes a direct retail network for the Company in Greece, enabling
a closer relationship with our consumers. The Latino Services acquisition increased the number of MoneyGram operated stores in the U.S. The
acquisition of MoneyGlobe, a provider of cash-to-
account money transfers from Greece to Bangladesh, will enable MoneyGram to offer a
technology-driven solution that meets the unique needs of consumers in Greece. See Note 3 — Acquisitions and Disposals
of the Notes to the
Consolidated Financial Statements for additional disclosure of details relating to acquisitions arising in 2013.
Our Segments
We manage our business primarily through two segments: Global Funds Transfer and Financial Paper Products. The following table presents the
components of our consolidated revenue associated with our segments for the years ended December 31 :
See Note 15 — Segment Information
of the Notes to the Consolidated Financial Statements for additional financial information about our
segments and geographic areas.
During 2013 , 2012 and 2011 , our 10 largest agents accounted for 43 percent , 44 percent and 45 percent
, respectively, of our total company fee
and investment revenue and 44 percent , 46 percent and 48 percent
, respectively, of the fee and investment revenue of our Global Funds
Transfer segment. Walmart is our only agent that accounts for more than 10 percent of our total company fee and investment revenue. In 2013
,
2012 and 2011 , Walmart accounted for 27 percent , 28 percent and 29 percent
, respectively, of our total company fee and investment revenue,
and 28 percent , 30 percent and 31 percent , respectively, of the fee and investment revenue of our Global Funds Transfer segment.
Global Funds Transfer Segment
The Global Funds Transfer segment is our primary revenue driver, providing global money transfer services and bill payment services primarily
to unbanked and underbanked consumers. We utilize a variety of proprietary point-of-
sale platforms, including AgentConnect, which is
integrated into an agent’s point-of-sale system, DeltaWorks and Delta T3, which are separate software and stand-
alone device platforms, and
MoneyGram Online.
We continue to focus on the growth of our Global Funds Transfer segment outside of the U.S. During 2013 , 2012 and 2011
, operations outside
of the U.S. generated 40 percent , 38 percent and 38 percent , respectively, of our total company revenue, and 42 percent , 41 percent and
42
percent , respectively, of our total Global Funds Transfer segment revenue. In 2013
, our Global Funds Transfer segment had total revenue of
$1,389.8 million .
Global Money Transfers —
We derive our money transfer revenues primarily from consumer transaction fees and the management of currency
exchange spreads on money transfer transactions involving different “send” and “receive”
currencies. We have corridor pricing capabilities that
provide us flexibility when establishing consumer fees and foreign exchange rates for our money transfer services, which allow us to remain
competitive in all locations. In a cash-to-
cash money transfer transaction, both the agent initiating the transaction and the receiving agent earn a
commission that is generally based on a percentage of the fee charged to the consumer. When a money transfer transaction is initiated at a
MoneyGram-owned store or kiosk or via our online platform, only the receiving agent earns a commission.
In certain countries, we have multi-
currency technology that allows consumers a currency choice when initiating or receiving a money transfer.
The currency choice typically consists of local currency, U.S. dollars and/or euros. These capabilities allow consumers to know the amount that
will be received in the selected currency.
5
2013
2012 2011
Global Funds Transfer
Money transfer
87.3
%
85.7
%
83.4
%
Bill payment
6.9
%
7.9
%
9.0
%
Financial Paper Products
Money order
3.7
%
4.3
%
4.9
%
Official check
2.0
%
2.0
%
2.6
%
Other
0.1
%
0.1
%
0.1
%
Total revenue
100.0
%
100.0
%
100.0
%