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Table of Contents
PART I
Item 1. BUSINESS
Overview
MoneyGram International, Inc. (together with our subsidiaries and consolidated entities, “MoneyGram,” the “Company,” “we,” “us” and “our”) is a global
provider of innovative money transfer services and is recognized worldwide as a financial connection to friends and family. Whether online, through a mobile
device, at a kiosk or in a local store, we connect consumers any way that is convenient for them. We also provide bill payment services, issue money orders and
process official checks in select markets. Our primary customers 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 cross-border remittance data, estimates that 2 billion adults are
unbanked, based on 2014 global data. As an alternative financial services provider, we provide these consumers with essential services to help them meet the
financial demands of their daily lives. Many of our customers utilize traditional banking services but prefer to use our services based on convenience, quality of our
service, trust of our brand, cost or to make urgent payments or transfers.
Our offerings include money transfers, bill payment services, money order services and official check processing. Our money transfer services are our primary
revenue driver. Money transfers are movements of funds between consumers from the origination or "send" location and the designated "receive" location.
MoneyGram earns revenue from the fees paid by the consumers sending the funds and from the management of currency exchange spreads on money transfer
transactions involving different “send” and “receive” currencies. We share a significant portion of that fee with both the sending and receiving agents. We also earn
bill payment services revenues primarily from transaction fees charged to consumers for each transaction completed. Additionally, we earn revenue from the sale
of our money order and official check products and generate revenue from the investment of funds underlying these products.
Our money transfer services enable our consumers to send and receive funds around the world through our extensive global network of locations, which are
primarily operated by third-party businesses ("agents"), but also include Company-operated retail locations. Operating in more than 200 countries and territories,
we have nearly doubled our network since 2009 to over 350,000 locations. We also offer Digital/Self-Service solutions such as moneygram.com, mobile solutions,
account deposit and kiosk-based services. We have one primary customer care center in Warsaw, Poland, 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, PrimeLink and MGiAlloy, 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 related to our business throughout this document, including the following:
Corridor — With regard to a money transfer transaction, the originating "send" location and the designated "receive" location are referred to as a corridor.
Corridor mix — The relative impact of increases or decreases in money transfer transaction volume in each 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 on revenues, commissions and other operating expenses for all countries where the functional currency is not the U.S.
dollar.
3