MoneyGram 2013 Annual Report Download - page 9

Table of Contents
Marketing
—
We have global marketing, product management and strategic partnership teams located in multiple geographical regions. We
employ a strategy of developing products and marketing campaigns that are global, yet tailored to address our consumer base and local needs. A
key component of our marketing efforts is our global branding. We use a marketing mix to support our brand, which includes traditional, digital
and social media, point of sale materials, signage at our agent locations, targeted marketing campaigns, seasonal campaigns and sponsorships.
Sales —
Our sales teams are organized by geographic area, product and delivery channel. We have dedicated teams that focus on developing our
agent and biller networks to enhance the reach of our money transfer and bill payment products. Our agent requirements vary depending upon
the type of outlet or location, and our sales teams continue to improve and strengthen our agent relationships with a goal of providing the optimal
agent and consumer experience.
Competition —
While the market for our money transfer and bill payment services continues to be very competitive, we remain the second
largest money transfer service company in the world based on total face value of remittances in 2012. The World Bank estimated that by 2016
cross-
border remittances will exceed $700 billion. We generally compete for money transfer agents on the basis of value, service, quality,
technical and operational differences, price, commission and marketing efforts. We compete for money transfer consumers on the basis of trust,
convenience, availability of outlets, price, technology and brand recognition.
Our competitors include a small number of large money transfer and bill payment providers, banks and a large number of small niche money
transfer service providers that serve select regions. Our largest competitor in the money transfer industry is the Western Union Company, or
Western Union, which competes with our bill payment services and money order businesses. We will encounter increasing competition as new
technologies emerge that allow consumers to send and receive money through a variety of channels. We continue to be an innovator in the
industry by diversifying our core money transfer revenue through new channels, such as online, mobile and other self-service offerings.
Financial Paper Products Segment
Our Financial Paper Products segment provides money orders to consumers through our retail agents and financial institutions located
throughout the U.S. and Puerto Rico, and provides official check outsourcing services for financial institutions across the U.S.
In 2013 , our Financial Paper Products segment generated revenues of $84.0 million
from fee and other revenue and investment revenue. We
earn revenue from the investment of funds underlying outstanding official checks and money orders. We refer to our cash and cash equivalents,
interest-bearing investments, and available-for-sale investments collectively as our “investment portfolio.”
Our investment portfolio primarily
consists of low risk, highly liquid, short-term U.S. government securities and bank deposits that produce a low rate of return.
Money Orders
—
Consumers use our money orders to make payments in lieu of cash or personal checks. 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 eight days. We sell money orders under the MoneyGram brand and on a private label or co-
branded basis with
certain large retail and financial institution agents in the U.S. As of December 31, 2013
, we issued money orders through our network of
approximately 51,000 agent and financial institution locations in the U.S. and Puerto Rico.
Official Check Outsourcing Services —
Official checks are used by consumers where a payee requires a check drawn on a bank. Financial
institutions also use official checks to pay their own obligations. As with money orders, we generate revenue from our official check outsourcing
services for U.S. banks and credit unions by charging per item and other fees, as well as from the investment of funds underlying outstanding
official checks, which generally remain outstanding for fewer than four days. As of December 31, 2013
, we provided official check outsourcing
services through approximately 1,100 financial institutions at approximately 7,400 branch bank locations.
Marketing
—
We employ a wide range of marketing methods to support our sales efforts. A key component of our marketing efforts is our
global branding. We use a marketing mix to support our brand, which includes traditional, digital and social media, point of sale materials,
signage at our agent locations and targeted marketing campaigns. Official checks are financial institution branded and therefore all marketing to
this segment is business to business.
Sales —
Our sales teams are organized by geographic area, product and delivery channel. We have dedicated teams that focus on developing our
agent and financial institution networks to enhance the reach of our official check and money order products. Our agent requirements vary
depending upon the type of outlet or location, and our sales teams continue to improve and strengthen our agent relationships with a goal of
providing the optimal agent and consumer experience.
Competition —
Our money order competitors include a small number of large money order providers and a small number of regional and niche
money order providers. Our largest competitors in the money order industry are Western Union and the United States Postal Service. We
generally compete for money order agents on the basis of value, service, quality, technical and operational
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