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MoneyGram

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MoneyGram International, Inc. is an American interstate and international peer-to-peer payments and money transfer company headquartered in Dallas, Texas.[2] It has an operations center in St. Louis Park, Minnesota, and regional and local offices around the world.

MoneyGram International, Inc
Company typePrivate
IndustryFinancial services
Founded1998; 26 years ago (1998)
HeadquartersDallas, Texas, United States
Key people
  • Anthony Soohoo
    (Chief Executive Officer)
  • Gary Ferrera
    (Chief Financial Officer)
  • Anna Greenwald
    (Chief Operating Officer)
  • Grant Lines
    (Chief Revenue Officer)
  • Cory Feinberg
    (General Counsel and Corporate Secretary)
  • Bahar Sahajwalla
    (Chief Regulatory and Public Affairs Officer)
  • Greg Hall
    (Chief Marketing Officer)
  • Jillian Slagter
    (Chief People Officer)
  • Craig Bernier
    (Chief Compliance Officer)
  • Sia Zahedi
    (Chief Data and Analytics Officer)
  • Joe Vaughan
    (Chief Technology Officer)
  • Sara Vassar
    (Chief Product Officer)
  • Veronica Larson
    (Chief Information Officer)
  • Christopher Russell
    (Chief Accounting Officer)
  • Dave Leitner
    (Chief Media and Acquisition Officer)
ProductsMoney transfers
Money orders
Official check
Bill payment services
Revenue$900 Million (2019)
Owner
Number of employees
Increase 2,269 (2020) [1]
Websitewww.moneygram.com

On June 1, 2023, Madison Dearborn Partners completed the acquisition of MoneyGram.[3]

Overview

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MoneyGram businesses are divided into two categories: Global Funds Transfers and Financial Paper Products.[4] The company provides its services to individuals and businesses through a network of agents and financial institutions.

In 2014, it was the second largest provider of money transfers in the world.[5][6][7] MoneyGram operates in more than 200 countries and territories with a global network of about 400,000 agent offices.[4]

History

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MoneyGram International was formed when two businesses merged: Minneapolis-based Travelers Express and Denver-based Integrated Payment Systems Inc.[8]

MoneyGram was first established as a subsidiary of Integrated Payment Systems and afterwards became an independent company before it was acquired by Travelers in 1998.[9][10] In 2004, Travelers Express became what is known today as MoneyGram International.

Travelers Express (1940–1997)

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The Minneapolis-based Travelers Express Co. Inc. was founded in 1940.[5] In 1965, Travelers Express was acquired by The Greyhound Corporation[11] (now known as Viad Corp) and became the nation's largest provider of money orders before initiating a company reorganization plan in 1993.[12]

MoneyGram Systems (1988–1997)

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MoneyGram was formed in 1988 as a subsidiary of Integrated Payment Systems Inc.[13][14][15] Integrated Payment Systems was a subsidiary of First Data Corporation, which was itself a subsidiary of American Express.[9] In 1992, First Data was spun off from American Express and publicly traded on the New York Stock Exchange.[9][16] First Data Corporation later merged with First Financial, the owners of rival Western Union.[9] In order to approve the merger, the Federal Trade Commission forced First Data to sell Integrated Payment Systems.[14]

Thomas Cook Global Foreign Exchange, under the stewardship of John Bavister, launched a re-engineered money transfer service in 1994. Branded as MoneyGram, the venture saw the partnering of the global travel giant with First Data Corp.[citation needed]

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.[16][14] In 1997, James F. Calvano, former president of Western Union, became MoneyGram Payment Systems CEO.[13] By the late 1990s, MoneyGram Payment Systems had served customers at over 22,000 locations in 100 countries.[13][16]

MoneyGram International Ltd. was established in 1997 by MoneyGram Payment Systems Inc. and Thomas Cook,[17] a year after the company had gone public.[13] 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.[18][19]

MoneyGram International (1998–present)

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In April 1998, Viad Corp acquired MoneyGram Payment Systems Inc.[10][20] for $287 million.[16] MoneyGram was then folded into Viad's Travelers Express in Minneapolis.[16] In November 2000, the MoneyGram brand and business was sold to Travelex as part of its acquisition of Thomas Cook Financial Services for £400m. In 2003, Travelers Express gained full ownership of the MoneyGram network, including MoneyGram International.[13] Later that year, Viad spun off Travelers Express as an independent company.[21] In January 2004, Travelers Express was renamed to MoneyGram International Inc.[21][22] 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.[13] The company had also introduced additional services such as bill payment and online money transfers.

During the financial crisis of 2007–2008, MoneyGram's shares fell 96 percent from 2007 to 2009.[23] 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.[24] During the drop, U.S. Bancorp shifted its money transfer services to Western Union.[25] The company became profitable again in 2009.[25]

Amid MoneyGram's turnaround, Pamela Patsley became the executive chairwoman of the company in January 2009 and was later named CEO in September of that year.[26][27] In November 2010, MoneyGram officially relocated its global headquarters to Dallas, Texas.[23][27] The company continues to maintain global operations and information technology centers in Minneapolis, Minnesota.[23]

In 2014, after MoneyGram lost a relationship with Wal-Mart, it began restructuring to cut costs. From a peak in 2013 until late 2015, shares fell about 70%.[28] MoneyGram closed a call center in Lakewood, Colorado resulting in over 500 layoffs, and closed its 376-person Brooklyn Center operation in 2015.[29] MoneyGram moved numerous positions to Warsaw, Poland from its Colorado and Minnesota locations to cut costs further.[30]

In 2015, the company's agent network in Africa reached 25,000 locations, including an agreement with the Mauritius Post Office.[31][32]

Between late October 2016 and January 2017, MoneyGram's shares doubled in value.[28] On January 26, 2017, Ant Financial Services Group announced a deal to acquire MoneyGram International for $880 million; the deal subsequently collapsed after it was rejected by the Committee on Foreign Investment in the United States.[28][33]

On June 17, 2019, MoneyGram announced a partnership with Ripple to utilize the digital asset XRP for cross-border remittance. Within 6 months, in February 2021 MoneyGram announced the end of the partnership after the US Securities and Exchange Commission sued Ripple for violating investor protection laws; [34] later that year MoneyGram announced a new partnership with Ripple's competitor Stellar to facilitate cross-border blockchain transactions settled in the USDC stablecoin.[35]

In July 2020, Digital Financial Services LLC and MoneyGram have collaborated to provide overseas remittance services in the UAE. Through this partnership, eWallet consumers would be able to initiate real-time foreign money transfers to friends and families in more than 200 countries and territories around the world through a network of mobile wallet providers, bank account deposit facilities, and more than 350,000 walk-in locations.[36]

In February 2022, MoneyGram agreed to be acquired for $1 billion in cash by Madison Dearborn Partners, a private equity firm.[37] The acquisition was completed in June 2023.

Products

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MoneyGram products

Money transfers

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  • MoneyGram Money Transfer
  • MoneyGram Bill Payments Services - allowing consumers to make urgent payments or pay routine bills to certain creditors.
  • MoneyGram as a Service – enables enterprise customers to leverage the company's core capabilities as productized service offerings to meet their various business needs and add services and scale.

Financial paper

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  • Money Orders - MoneyGram is the second largest money order supplier.[6][7][38]
  • Official Checks - MoneyGram offers official check outsourcing services which are available to financial institutions in the United States. Official Checks are used by consumers where a payee requires a check drawn on a bank and by financial institutions to pay their own obligations.

Cryptocurrency

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  • Cryptocurrency Cash Network – Through a relationship with Coinme,[39] consumers can purchase or exchange bitcoin for U.S. dollars at select MoneyGram retail locations.[40]
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In November 2012, MoneyGram International admitted to anti-money laundering (AML) and wire fraud violations as a result of a criminal complaint filed in the Middle District of Pennsylvania charging MoneyGram with willfully failing to maintain an effective AML program and aiding and abetting wire fraud [41] MoneyGram services were used by unrelated parties involved in mass marketing and consumer phishing scams that defrauded thousands of victims in the United States.[42]

As a part of the settlement, it created a $100 million victim compensation fund.[43] MoneyGram also retained a corporate monitor who reported regularly to the United States Department of Justice for a five-year period, subsequently extended for 30 months after the deferred prosecution amendment was amended. Upon successful completion of the DPA terms in June 2021, the charges of aiding and abetting wire fraud were dismissed. [43]

The company 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.[42] In February 2015, MoneyGram assisted a Houston reporter in shutting down a fraud scam after discovering a scheme that utilized an account with the company.[44]

In February 2016, MoneyGram agreed to 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.[45]

In April 2022, the U.S. Consumer Financial Protection Bureau and New York Attorney General filed a complaint against MoneyGram alleging repeated violations of the law, ignoring customer complaints and government warnings. The complaint states that the company has repeatedly "stranded" recipients waiting for their money, provided senders inaccurate information about transfer completion and failed to address customer complaints in accordance with the 2013 rule. (See Consumer Financial Protection Bureau et al v MoneyGram International Inc et al, U.S. District Court, Southern District of New York, No. 22-03256.)[46]

In September 2024, the US District Court for the Eastern District of Texas granted summary judgment in favor of the US Chamber of Commerce and other trade associations, holding that the CFPB operated outside its constitutionL authority when it attempted to regulate “unfair acts” of practices under the Dodd-Frank Act when it updated its examination manual. The CFPB has appealed to the US Supreme Court. As a result, most all high-level litigation brought by the CFPB is on hold awaiting US Supreme Court review and action on the pending appeal.

Philanthropy and marketing

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MoneyGram launched the MoneyGram Foundation in 2013, which focuses on distributing grants internationally to support education.[47] The MoneyGram Foundation distributed grants in 19 countries in its first year of operations.[47] The Foundation gets the bulk of its funding from MoneyGram International, and builds on MoneyGram's previous Global Giving Program.[48]

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.[42]

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.[49][50] 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.[51] Moneygram also contributed to relief efforts following Typhoon Haiyan in 2013 in the Philippines.[52]

The company has also participated in the One Laptop per Child initiative[53] and Habitat for Humanity through the MoneyGram Foundation.[54]

On October 20, 2022, MoneyGram announced a multi-year title sponsorship deal with Haas F1 Team (with the team renamed as MoneyGram Haas F1 Team) for the 2023 Formula One season onwards.[55]

As of the end of 2023, MoneyGram facilitated more than 955,000 transactions totaling more than $307 million for its partners Red Rose and the United Nations High Commission for Refugees (UNHCR), representing vital aid in seven European countries (Ukraine, Poland, Romania, Moldova, Bulgaria, Slovakia, and Hungary. [56]

References

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  1. ^ "MoneyGram Number of Employees". Macrotrends. Retrieved 11 March 2021.
  2. ^ Steve Brown (24 September 2010). "MoneyGram chooses downtown Dallas for new headquarters". The Dallas Morning News. Retrieved 11 December 2014.
  3. ^ "Madison Dearborn Partners Completes Acquisition of MoneyGram". PR Newswire. Retrieved 2023-07-28.
  4. ^ a b "About MoneyGram". MoneyGram. Archived from the original on 8 July 2014. Retrieved 6 January 2015.
  5. ^ a b "MoneyGram remittance costs are just 5%". Bizcommunity.com. 8 February 2013. Retrieved 29 September 2014.
  6. ^ a b 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.
  7. ^ a b "MoneyGram claims bank status in tax dispute with U.S. IRS". Reuters. 27 May 2014. Retrieved 11 December 2014.
  8. ^ Vomhof, John (January 3, 2006). "MoneyGram to drop Travelers Express brand after merger". www.bizjournals.com. Retrieved 2022-04-27.
  9. ^ a b c d 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.
  10. ^ a b "Viad raises offer to buy MoneyGram". The Denver Post.
  11. ^ "Greyhound Corporation and Travelers Express". New York Times. 7 January 1965. Retrieved 3 April 2018.
  12. ^ Vrana, Debora (14 August 1993). "Travelers Express to Reorganize, Close Anaheim Office". Los Angeles Times. Retrieved 29 September 2014.
  13. ^ a b c d e f Greenland, Paul R. (2008). Tina Grant (ed.). "MoneyGram International, Inc". International Directory of Company Histories. Vol. 94. Detroit: St. James Press. pp. 315–318.
  14. ^ a b c "FIRST DATA SPINNING OFF MONEYGRAM UNIT". The Record. January 17, 1996.
  15. ^ "Form 8-K". Securities & Exchange Commission. Retrieved 11 October 2014.
  16. ^ a b c d e Steven Lipin (6 April 1998). "Viad of Phoenix Agrees to Acquire Payments Firm for $287 Million". Wall Street Journal. Retrieved 29 September 2014.
  17. ^ "MoneyGram Acquires Travelex Group's Interest in Joint Venture". businesswireindia.com. Retrieved 2018-07-30.
  18. ^ "MONEYGRAM, THOMAS COOK FORM JOINT VENTURE FOR". Bloomberg. Retrieved 11 October 2014.
  19. ^ "Form 10-K". Securities & Exchange Commission. Archived from the original on 31 October 2014. Retrieved 11 October 2014.
  20. ^ Vandeveire, Mary (29 May 1998). "Viad buys MoneyGram for $219 M". The Business Journal - Serving Phoenix & the Valley of the Sun.
  21. ^ a b Tom Smith (22 March 2007). "35. MoneyGram International Inc". Minneapolis/St. Paul Business Journal. Retrieved 20 November 2014.
  22. ^ "Viad completes MoneyGram spinoff". Phoenix Business Journal. 1 July 2004. Retrieved 20 November 2014.
  23. ^ a b c Jennifer Bjorhus (12 May 2014). "MoneyGram closing Brooklyn Center offices; 28 to lose jobs June 30". Star Tribune. Retrieved 20 November 2014.
  24. ^ 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.
  25. ^ a b Chris Serres (31 March 2009). "MoneyGram paid ex-CEO $13.1 million". Star Tribune. Retrieved 20 November 2014.
  26. ^ Shashana Pearson-Hormillosa (30 November 2012). "MoneyGram CEO Pamela Patsley works to build new company legacy". Dallas Business Journal. Retrieved 20 November 2014.
  27. ^ a b Karen Nielsen (November 2011). "MoneyGram's Turnaround Artist". D Magazine. Retrieved 20 November 2014.
  28. ^ a b c Carew, Rick; Demos, Telis (January 26, 2017), China's Ant Financial, Owned by Trump Ally Jack Ma, Makes U.S. Play, Wall Street Journal, retrieved January 27, 2017
  29. ^ "MoneyGram is closing its 376-person Brooklyn Center operation - MoneyGram". www.companyowl.com.
  30. ^ "Cash transfer firm MoneyGram to create 500 jobs at new Warsaw unit » Poland Today". Archived from the original on 2016-03-06. Retrieved 2016-03-01.
  31. ^ Marc Mcilhone (18 February 2015). "MoneyGram Reaches 25,000 Locations Across Africa". African Brains. Retrieved 7 April 2015.
  32. ^ Masahudu Ankiilu Kunateh (19 February 2015). "Africa: Moneygram Reaches 25,000 Locations in Africa". All Africa. Retrieved 7 April 2015.
  33. ^ Roumeliotis, Greg (2018-01-02). "U.S. shoots down MoneyGram's sale to China's Ant Financial". Reuters. Reuters.
  34. ^ "MoneyGram's Decision to Halt Ripple Partnership Leaves CFO With Earnings Hole". WSJ. 26 February 2021.
  35. ^ "MoneyGram Partners With Ripple Competitor Stellar, Will Settle Transactions With USDC Stablecoin". Forbes. 6 October 2021.
  36. ^ "Digital Financial Services partners with MoneyGram to offer eWallet services in the UAE". CommsMEA. 5 July 2020. Retrieved 28 July 2020.
  37. ^ "MoneyGram to Be Bought by Madison Dearborn for $1 Billion". Bloomberg. 15 February 2022.
  38. ^ Jennifer Bjorhus (12 May 2014). "MoneyGram closing Brooklyn Center offices; 28 to lose jobs June 30". Star Tribune. Retrieved 11 December 2014.
  39. ^ Browne, Ryan (2021-05-12). "MoneyGram to let cryptocurrency holders cash in their investments". CNBC. Retrieved 2021-10-24.
  40. ^ Nunez, Adriana. "MoneyGram is re-entering the crypto scene with a Coinme partnership". Business Insider. Retrieved 2021-10-24.
  41. ^ "Moneygram International Inc. Admits Anti-Money Laundering and Wire Fraud Violations, Forfeits $100 Million in Deferred Prosecution". justice.gov. November 9, 2012. Retrieved March 21, 2013.
  42. ^ a b c Shashana Pearson-Hormillosa (30 November 2014). "MoneyGram CEO Pamela Patsley works to build new company legacy". Dallas Business Journal. Retrieved 11 December 2014.
  43. ^ a b "Federal judge OKs MoneyGram fraud deal, $100M fund." ap.org. November 28, 2012. Retrieved on March 21, 2013.
  44. ^ Ted Oberg (11 February 2015). "Ted Oberg gets a 'too good to be true' phone call". ABC13 News. Retrieved 7 April 2015.
  45. ^ "MoneyGram to pay $13 million to end money transfer probe". Reuters. February 11, 2016 – via www.reuters.com.
  46. ^ Stempel, Jonathan; Johnson, Katanga (2022-04-21). "MoneyGram sued by U.S., New York for unfair remittance transfers". Reuters. Retrieved 2022-04-22.
  47. ^ a b "MoneyGram Foundation". MoneyGram. Retrieved 11 December 2014.
  48. ^ "MoneyGram Foundation awards six more grants Archived 2015-04-16 at the Wayback Machine."
  49. ^ Sam Black (14 January 2010). "MoneyGram reduces fees to send money to Haiti". Minneapolis/St. Paul Business Journal. Retrieved 11 December 2014.
  50. ^ "MoneyGram International reduces fees to Haiti". The Seattle Times. 14 January 2010. Retrieved 11 December 2010.
  51. ^ Hanah Cho (6 November 2012). "MoneyGram pledges donations to Red Cross for transactions sent to affected Sandy areas". The Dallas Morning News. Archived from the original on 15 April 2015. Retrieved 11 December 2014.
  52. ^ Hanah Cho (14 November 2013). "MoneyGram donates $50,000 to support victims of Typhoon Haiyan". The Dallas Morning News. Archived from the original on 15 April 2015. Retrieved 11 December 2014.
  53. ^ "MoneyGram, OLPC donate 250 tablets to students in SA". Telecompaper. 31 July 2014. Retrieved 11 December 2014.
  54. ^ Kenneth Chan (2 March 2005). "MoneyGram Makes $1 Million Commitment with Habitat for Humanity". The Christian Post. Retrieved 11 December 2014.
  55. ^ "Introducing the New MoneyGram Haas F1 Team: MoneyGram Announces Title Sponsorship of Haas F1 Team for 2023 Season and Beyond" (Press release). MoneyGram. October 20, 2022.
  56. ^ "Final 2023 MoneyGram Social Impact Report" (Press release).
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