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MoneyGram

Company

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A company of international level - money transfers. The MoneyGram network includes about 350,000 money transfer receiving and sending points in 190 countries and regions.

Owners:
Ant Financial Services Group
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Owners

Performance indicators

2012

The company's total revenue for the year amounted to $1341.2 million, an increase of 7% compared to 2011. Commission income and other revenues of the company increased by 8% compared to the previous year and amounted to $1328.6 million. Income from remittances and other revenues increased by 10% compared with the same indicators of the previous year to $1148.5 million, CNews reported in MoneyGram.

The volume of remittances increased by 14% compared to 2011. As the company explained, the increase in this indicator was due to an increase in the volume of remittances outside the United States by 18%, within the United States - by 10%, an increase in the outbound volume of transactions from the United States by 13%, as well as the volume of transfers from the United States to Mexico - by 21%. At the same time, the global network of system agents grew by 16% and amounted to more than 310 thousand branches around the world.

Net loss of the company for 2012 amounted to $49.3 million, loss on EBITDA - $139.9 million. According to MoneyGram, the net loss and EBITDA indicators were primarily influenced by the costs of resolving issues with the US Attorney's Office in Pennsylvania in the amount of $100 million, restructuring and reorganization in the amount of $19.3 million, payments of remuneration on shares ($9.2 million) and legal expenses ($19.2 million).

2012 EBITDA increased by 6% to $278.9 million compared to the previous year. In 2012, adjusted EBITDA margin was 20.8%, slightly lower than in 2011 (21.1%). Adjusted EBITDA showed a decline due to a lower estimate of the euro against the US dollar compared to last year, the company explained, as well as a decrease in investment income of $4.3 million.

MoneyGram's average loss per common share was $0.69. (of which $1.58 per share - legal charges and expenses, $0.17 - restructuring and reorganization costs, $0.08 - compensation).

2011

The company's net profit for the 4th quarter of 2011 amounted to $3.1 million, in terms of EBITDA - $22 million. Net profit and EBITDA for the 4th quarter of last year were primarily affected by debt repayment costs of $32.3 million, reorganization and restructuring costs ($6.2 million) and share payments ($4.1 million).

The number of remittances in the last quarter of 2011 increased by 13%, the growth in the volume of transfers within the United States amounted to 15%, transfers from other countries - 14%. The number of transfers sent from the United States increased by 10%, an especially high growth of 15% was recorded in the US-Mexico corridor.

Total revenue in Q4 increased by 6% to $321.8 million compared to revenue of $303.4 million for the same period in 2010. Commission and other types of income increased by 7% to $318.8 million (from $298.3 million).

Total revenue for the whole of 2011 increased by 7% to $1247.8 million compared to $1166.7 million in 2010.

History

2023: Commitment to reimburse customers for stolen $115 million

On February 14, 2023, it became known that the US authorities ordered MoneyGram to pay almost 40,000 victims of fraud using the money transfer service compensation in the amount of $115 million.

Users will receive their share of funds that MoneyGram seized in 2018 as part of a deferred prosecution agreement (DPA). This action was led by the US Federal Trade Commission (FTC) and the US Department of Justice (DoJ).

According to court documents, the MoneyGram service violated 2 previous agreements - the FTC of 2012 and the Ministry of Justice of 2015 - in which MoneyGram was obliged to prevent the actions of fraudsters using the service's services to steal users' money.

In particular, MoneyGram agreed to implement a fraud prevention program that required the firm to promptly "investigate, restrict, suspend and fire fraud agents."

The FTC said MoneyGram was aware of the ongoing fraud at its payment network but turned a blind eye to it, thus violating the FTC's order. Victims will be fully reimbursed for the stolen amounts and the process will be overseen by the United States Postal Inspection Service (USPIS), which was heavily involved in the investigation.

MoneyGram money transfer system has been repeatedly used by cybercriminals to launder stolen funds and deceive users whom fraudsters, under various pretexts, convinced to transfer money to them[1]

2021: Termination of direct services to individuals in Russia

In March 2021, MoneyGram announced the termination of direct service to individuals in Russia. It is expected that the only officially registered foreign money transfer system in the Russian Federation will leave the country.

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From March 1, 2021, receiving cash transfers in Russia will be available only at branches of partner banks (more than 5,000 branches) of the Golden Crown payment system, the MoneyGram website says.
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It is now impossible to send a transfer from Russia to another country, RBC said, citing a source in the payment market and the operator of the MoneyGram call center.

MoneyGram will apply for refusal to register with the Central Bank and completely stop independent work in the market, Kommersant writes, citing sources.

MoneyGram payment system stopped providing services to individuals in the Russian Federation

According to the newspaper, the service could make the corresponding decision in connection with the tightening of Russian legislation, including the requirements for operators of foreign payment systems to create the entire infrastructure in the Russian Federation, in particular settlement and processing centers.

The publication says that in Russia, the Golden Crown, with which MoneyGram began to cooperate, is the largest player in the money transfer market with a share of about 70%, the system has more than 160 partner banks for issuing and sending transfers and about 5 thousand non-bank points.

Nikolai Smirnov, chairman of the board of directors of the Golden Crown, called it a "strategic partnership." He added that the company is providing its infrastructure as a service for the first time and plans to implement sending transfers to MoneyGram from the Golden Crown.

Thanks to the partnership, MoneyGram will be able to maintain its customer base and loyalty, as well as provide an alternative and most likely cheaper service, the newspaper notes. For example, MoneyGram costs 3-5% of the amount sent from Russia abroad, and the Golden Crown costs about 1%.[2]

2018: $125 million fine for cheating customers

On November 8, 2018, MoneyGram International agreed to pay a $125 million fine to the US Department of Justice over fraud allegations.

The US department submitted documents to the federal court according to which in 2012 MoneyGram violated the terms of the contract with the government, hiding the vulnerabilities and defects of its anti-fraud program.

MoneyGram fined $125m for cheating customers

The investigation, which ran from 2003 to 2009, found that MoneyGram was aware of fraudulent promotions that were conducted on its behalf in the United States and Canada. As a result, in the period from April 2015 to October 2016 alone, fraudsters received more than $125 million from MoneyGram customers. Victims were told they had become lottery winners or holders of bogus loans and big cash prizes. As part of the scheme, "high-discount" products or sham services for "special" buyers were also distributed, court documents said. Victims sent advance payments to fake recipients using MoneyGram, after which communication with fraudsters was interrupted.

The money paid as part of the fine will be transferred to the victims, according to the US Department of Justice. Prior to that, the company had already paid $100 million in 2012 as part of a fraud settlement and entered into a deferred prosecution agreement. MoneyGram also resolved a disagreement with the Federal Trade Commission, which accused the money transfer service of violating the law in 2009.

A deferred prosecution agreement concluded by MoneyGram with the justice department in 2012 will run until May 2021. The new resolution requires the approval of a federal judge overseeing the case. A MoneyGram spokesperson refrained from commenting after Bloomberg's requests.[3]

2017: Alibaba Ant Financial to acquire MoneyGram system

Representatives of Ant Financial Services Group, a branch of Chinese e-commerce firm Alibaba Group Holding Ltd, announced at the beginning of the year a planned deal to acquire the American electronic money transfer company MoneyGram International Inc. The transaction amount is about 880 million US dollars. According to company representatives, this transaction will be completed in the second half of 2017. [4] to [5].

The stock is being offered at $13.25 apiece - at a premium of 11.5% to MoneyGram's stock price at the close of trading on Wednesday. However, by the time of the opening of trading, the price of MoneyGram shares was $15.50, i.e. about 31% higher.

Ant Financial said it will take over the payment or refinancing of MoneyGram debt, which as of September 30, taking into account counter obligations amounted to $937.3 million in accordance with the statements submitted to regulators.

MoneyGram's largest shareholder, Thomas H. Lee Partners, which has a 44.5% stake, agreed to vote in favor of the deal, company officials said.

Notes