MoneyGram

MoneyGram International Inc
Public
Traded as NASDAQ: MGI
Industry Financial Services
Founded 1940 (1940)
Headquarters Dallas, Texas, U.S.
Key people
 Alex Holmes (CEO)
Larry Angelili (CFO)
Pam Patsley (Chairman)
Products Money transfers
Money orders
Official check
Bill payment services
Website MoneyGram.com

MoneyGram International Inc. is a money transfer company based in the United States with headquarters in Dallas, Texas.[1] It has an operation center in St. Louis Park, Minnesota and regional and local offices around the world. MoneyGram is a public company and listed under the ticker symbol MGI.[2] MoneyGram businesses are divided into two categories: Global Funds Transfers and Financial Paper Products.[3] The company works with individuals and businesses through a network of agents and financial institution customers.

MoneyGram is the second largest provider of money transfers in the world.[4][5][6] The company operates in more than 200 countries with a global network of about 347,000 agent offices.[3]

History

MoneyGram International was a result of two businesses merging, Minneapolis-based Travelers Express and Denver-based Integrated Payment Systems Inc. MoneyGram was initially established as a subsidiary of Integrated Payment Systems and then became independent company before it was acquired by Travelers in 1998.[7][8] In 2004, Travelers Express became what is known today as MoneyGram International.

Travelers Express (1940–1997)

Minneapolis-based Travelers Express Co. Inc. was founded in 1940.[4] A subsidiary of Viad Corporation, it became the nation's largest provider of money orders before initiating a company reorganization plan in 1993.[9] By the late 1990s, MoneyGram Payment Systems had served customers at over 22,000 locations in 100 countries.[10][11]

MoneyGram Payment Systems (1988–1997)

MoneyGram was formed in 1988 as a subsidiary of Integrated Payment Systems Inc.[10][12][13] Integrated Payment Systems was a subsidiary of First Data Corporation, which was itself a subsidiary of American Express.[7] In 1992, First Data was spun off from American Express and publicly traded on the New York Stock Exchange.[7][11] First Data Corporation later merged with First Financial, the owners of rival Western Union.[7] In order to approve the merger, the Federal Trade Commission forced First Data to sell Integrated Payment Systems.[12]

In 1996, Integrated Payment Systems, the nation's second largest non-bank consumer money transfer business, became its own publicly traded company and was renamed MoneyGram Payment Systems Inc.[11][12] In 1997, James F. Calvano, former president of Western Union, became MoneyGram Payment Systems CEO.[10]

MoneyGram International Ltd. was established in 1997 by MoneyGram Payment Systems Inc. a year after the company had gone public.[10] At the time when MoneyGram International was established, MoneyGram Payment Systems owned 51 percent of the company, while the other 49 percent was owned by the Thomas Cook Group.[14][15]

MoneyGram International (1998–present)

In April 1998, Viad acquired MoneyGram Payment Systems Inc.[8][16] for $287 million.[11] MoneyGram was then folded into Viad's Travelers Express in Minneapolis.[11]

In 2003, Travelers Express gained full ownership of the MoneyGram network, including MoneyGram International.[10] Later that year, Viad spun off Travelers Express as an independent company.[17] In January 2004 and Travelers Express was renamed to MoneyGram International Inc.[17][18] In June 2004, Viad sold MoneyGram and it became a publicly traded, individual entity.

By 2006, MoneyGram International had expanded internationally to include over 96,000 agents in regions such as the Asian-Pacific, Eastern Europe, and Central America.[10] The company had also introduced additional services such as bill payment and online money transfers.

During the financial crisis, MoneyGram's shares fell 96 percent from 2007 to 2009.[19] It lost more than $1.6 billion from investments in securities backed by risky mortgages in 2008, and the losses led the company to sell a majority stake to Thomas H. Lee Partners and Goldman Sachs in exchange for a cash infusion.[20] During the drop, U.S. Bancorp shifted its money transfer services to Western Union.[21] The company began to see profitability again in 2009.[21]

Amid MoneyGram's turnaround, Pamela Patsley became the executive chairman of the company in January 2009 and was later named CEO in September of that year.[22][23] In November 2010, MoneyGram officially relocated its global headquarters to the city of Dallas, Texas.[19][23] The company continues to maintain global operations and information technology centers in Minneapolis, Minnesota.[19]

Moneygram has closed a Global Customer Care Operations center in Lakewood, CO resulting in over 500 layoffs. Furthermore, MoneyGram closed its 376-person Brooklyn Center operation in 2015.[24] Moneygram has offshored numerous positions to Warsaw, Poland from its Colorado and Minnesota locations for additional cost cutting.[25]

In 2015, the company's agent network in Africa reached 25,000 locations, including an agreement with the Mauritius Post Office.[26][27]

Products

MoneyGram products

Global Funds Transfers

Financial Paper Products

Controversy

In November 2012, MoneyGram International admitted to anti-money laundering and wire fraud violations.[29] MoneyGram services were used by unrelated parties involved in mass marketing and consumer phishing scams that defrauded thousands of victims in the United States.[30] As a part of the settlement, MoneyGram created a $100 million victim compensation fund.[31] MoneyGram also retained a corporate monitor who will report regularly to the United States Department of Justice for a five-year trial period. If MoneyGram fulfills its obligations under the settlement, prosecutors will seek dismissal of the charges of aiding and abetting wire fraud.[31] MoneyGram also terminated any agents complicit in the 2009 scams and invested more than $84 million in improvements to the company's consumer anti-fraud systems and consumer awareness education.[30] In February 2015, MoneyGram assisted a local Houston reporter in shutting down a fraud scam after discovering a scheme that utilized an account with the company.[32]

In February 2016, MoneyGram agreed it would pay $13 million to end a probe stemming from customer complaints that scam artists duped them into wiring funds via the money transfer service. The settlement, with attorneys general in 49 states and Washington, D.C., includes $9 million for a nationwide fund that will facilitate the return of money to some MoneyGram customers and $4 million to cover states' costs and fees, according to numerous announcements by state attorneys general.[33]

Philanthropy

MoneyGram launched the MoneyGram Foundation in 2013, which focuses on distributing grants internationally to support education.[34] The MoneyGram Foundation distributed grants in 19 countries in its first year of operations.[34] The Foundation gets the bulk of its funding from MoneyGram International, and builds on MoneyGram's previous Global Giving Program.[35]

Through MoneyGram, Global Giving made a donation of $100,000 to World Vision International for education and school supplies, and another donation of $30,000 for the Girls Exploring Math and Science program in Dallas.[30]

MoneyGram participated in relief aid following the 2010 Haiti earthquake by reducing their fees to only $1 for any transactions to Haiti along with a $10,000 grant to Pan American Development Foundation and American Red Cross.[36][37] In 2012, MoneyGram contributed to Hurricane Sandy relief efforts by pledging to donate $1 per transaction up to $200,000 to the American Red Cross.[38]

The foundation has also contributed to other relief efforts following events such as Typhoon Haiyan in the Philippines.[39] The company has also participated in the One Laptop per Child initiative[40] and Habitat for Humanity through the MoneyGram Foundation.[41]

Alternative providers

See also

References

  1. ↑ Steve Brown (24 September 2010). "MoneyGram chooses downtown Dallas for new headquarters". The Dallas Morning News. Retrieved 11 December 2014.
  2. ↑ "Moneygram International, Inc.". NASDAQ. Retrieved 11 December 2014.
  3. 1 2 "About MoneyGram". MoneyGram. Retrieved 6 January 2015.
  4. 1 2 "MoneyGram remittance costs are just 5%". Bizcommunity.com. 8 February 2013. Retrieved 29 September 2014.
  5. 1 2 Tara Lachapelle; Brooke Sutherland; Matthew Monks (21 June 2013). "MoneyGram Seen Cashing In at Decade-High Price: Real M&A". Bloomberg. Retrieved 11 December 2014.
  6. 1 2 "MoneyGram claims bank status in tax dispute with U.S. IRS". Reuters. 27 May 2014. Retrieved 11 December 2014.
  7. 1 2 3 4 Dash, Eric (27 January 2006). "Western Union, Growing Faster Than Its Parent, Is to Be Spun Off". The New York Times. Retrieved 29 September 2014.
  8. 1 2 "Viad raises offer to buy MoneyGram". The Denver Post.
  9. ↑ Vrana, Debora (14 August 1993). "Travelers Express to Reorganize, Close Anaheim Office". Los Angeles Times. Retrieved 29 September 2014.
  10. 1 2 3 4 5 6 Greenland, Paul R. (2008). Tina Grant, ed. "MoneyGram International, Inc.". International Directory of Company Histories. 94. Detroit: St. James Press. pp. 315–318.
  11. 1 2 3 4 5 Steven Lipin (6 April 1998). "Viad of Phoenix Agrees to Acquire Payments Firm for $287 Million". Wall Street Journal. Retrieved 29 September 2014.
  12. 1 2 3 "FIRST DATA SPINNING OFF MONEYGRAM UNIT.". The Record. January 17, 1996.
  13. ↑ "Form 8-K". Securities & Exchange Commission. Retrieved 11 October 2014.
  14. ↑ "MONEYGRAM, THOMAS COOK FORM JOINT VENTURE FOR". Bloomberg. Retrieved 11 October 2014.
  15. ↑ "Form 10-K". Securities & Exchange Commission. Retrieved 11 October 2014.
  16. ↑ Vandeveire, Mary (29 May 1998). "Viad buys MoneyGram for $219 M". The Business Journal - Serving Phoenix & the Valley of the Sun.
  17. 1 2 Tom Smith (22 March 2007). "35. MoneyGram International Inc.". Minneapolis/St. Paul Business Journal. Retrieved 20 November 2014.
  18. ↑ "Viad completes MoneyGram spinoff". Phoenix Business Journal. 1 July 2004. Retrieved 20 November 2014.
  19. 1 2 3 Jennifer Bjorhus (12 May 2014). "MoneyGram closing Brooklyn Center offices; 28 to lose jobs June 30". Star Tribune. Retrieved 20 November 2014.
  20. ↑ Tara Lachapelle; Brooke Sutherland; Matthew Monks (21 June 2013). "MoneyGram Seen Cashing In at Decade-High Price: Real M&A". Bloomberg. Retrieved 20 November 2014.
  21. 1 2 Chris Serres (31 March 2009). "MoneyGram paid ex-CEO $13.1 million". Star Tribune. Retrieved 20 November 2014.
  22. ↑ Shashana Pearson-Hormillosa (30 November 2012). "MoneyGram CEO Pamela Patsley works to build new company legacy". Dallas Business Journal. Retrieved 20 November 2014.
  23. 1 2 Karen Nielsen (November 2011). "MoneyGram's Turnaround Artist". D Magazine. Retrieved 20 November 2014.
  24. ↑ http://www.companyowl.com/i/n/moneygram-closing-376person-brooklyn-center-operation/718847
  25. ↑ http://poland-today.pl/portal/business/banking--finance/cash-transfer-firm-moneygram-to-create-500-jobs-at-new-warsaw-unit-
  26. ↑ Marc Mcilhone (18 February 2015). "MoneyGram Reaches 25,000 Locations Across Africa". African Brains. Retrieved 7 April 2015.
  27. ↑ Masahudu Ankiilu Kunateh (19 February 2015). "Africa: Moneygram Reaches 25,000 Locations in Africa". All Africa. Retrieved 7 April 2015.
  28. ↑ Jennifer Bjorhus (12 May 2014). "MoneyGram closing Brooklyn Center offices; 28 to lose jobs June 30". Star Tribune. Retrieved 11 December 2014.
  29. ↑ "Moneygram International Inc. Admits Anti-Money Laundering and Wire Fraud Violations, Forfeits $100 Million in Deferred Prosecution." justice.gov. November 9, 2012. Retrieved on March 21, 2013.
  30. 1 2 3 Shashana Pearson-Hormillosa (30 November 2014). "MoneyGram CEO Pamela Patsley works to build new company legacy". Dallas Business Journal. Retrieved 11 December 2014.
  31. 1 2 "Federal judge OKs MoneyGram fraud deal, $100M fund." ap.org. November 28, 2012. Retrieved on March 21, 2013.
  32. ↑ Ted Oberg (11 February 2015). "Ted Oberg gets a 'too good to be true' phone call". ABC13 News. Retrieved 7 April 2015.
  33. ↑ http://www.reuters.com/article/us-moneygram-fraud-settlement-idUSKCN0VK261
  34. 1 2 "MoneyGram Foundation". MoneyGram. Retrieved 11 December 2014.
  35. ↑ "MoneyGram Foundation awards six more grants."
  36. ↑ Sam Black (14 January 2010). "MoneyGram reduces fees to send money to Haiti". Minneapolis/St. Paul Business Journal. Retrieved 11 December 2014.
  37. ↑ "MoneyGram International reduces fees to Haiti". The Seattle Times. 14 January 2010. Retrieved 11 December 2010.
  38. ↑ Hanah Cho (6 November 2012). "MoneyGram pledges donations to Red Cross for transactions sent to affected Sandy areas". The Dallas Morning News. Retrieved 11 December 2014.
  39. ↑ Hanah Cho (14 November 2013). "MoneyGram donates $50,000 to support victims of Typhoon Haiyan". The Dallas Morning News. Retrieved 11 December 2014.
  40. ↑ "MoneyGram, OLPC donate 250 tablets to students in SA". Telecompaper. 31 July 2014. Retrieved 11 December 2014.
  41. ↑ Kenneth Chan (2 March 2005). "MoneyGram Makes $1 Million Commitment with Habitat for Humanity". The Christian Post. Retrieved 11 December 2014.
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