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MoneyGram (MGI) Tie-Up to Boost Card Deposit Service in Europe

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MoneyGram International, Inc. recently collaborated with the leading connected payments platform, Checkout.com, in a bid to bolster its Visa Inc.’s (V - Free Report) debit card deposit service in Europe.

Notably, MoneyGram has had strong ties with Visa since 2019, when both the fintechs joined forces to launch the abovementioned debit card deposit service. The service empowered consumers to make cross-border payments from the United States through MoneyGram to the recipient’s eligible debit card.

Being a principal member of Visa since 2013, Checkout.com has been making use of Visa's real-time push payments platform – Visa Direct for providing a seamless payment experience.

The latest partnership has helped MoneyGram to not only collaborate with a leading fintech but also strengthened its alliance with Visa. Further, the tie-up has paved way for MoneyGram customers, who can utilize the company's website or mobile app to transfer money through digital means to Visa debit card holders across 575 corridors from 25 countries in Europe.

With access to Visa’s enhanced payment solutions, business scale and worldwide presence, both MoneyGram and Checkout.com are likely to benefit from the recent tie-up. On one hand, addition of Checkout.com is likely to result in cost-effective and real-time payments for MoneyGram customers. On the other hand, the cutting-edge technologies of Checkout.com is likely to reinforce MoneyGram’s position as a leading global payment solutions provider in the market.

Consequent to constant pressure on the company’s revenues for quite some time, MoneyGram has prioritized investments to build a robust digital arm. With the coronavirus outbreak accelerating adoption of digital means, the importance of moving funds across borders on a real-time basis came to the forefront as well. This is because it not only takes less time but also reduces costs compared to when companies would operate their stores at remittance locations. This persuaded the company to further ramp up efforts to enhance its digital services suite on the back of partnerships and constant technological upgradations.

While the pandemic had an adverse impact on the operating performance of most companies, it is the strong online platform that had helped MoneyGram to tide over the pandemic induced difficulties. Case in point, MoneyGram’s direct-to-consumer digital business — MoneyGram Online (MGO) in December witnessed the 12th consecutive month of triple-digit cross-border transaction growth.

There is no doubt about digitization being the new way of life and is here to stay even beyond the pandemic in the remittance industry. The latest move seems to be time opportune since Europe has been one of the largest sending remittance markets. Surge in cross-border transactions, emergence of wireless remittance systems and accelerated adoption of banking & financial services have positioned the global remittance industry well for growth. According to Allied Market Research, the remittance market is anticipated to witness a CAGR of 3.9% over 2019-2026.

Some other companies active in the digital remittance space include The Western Union Company (WU - Free Report) and PayPal Holdings Inc. (PYPL - Free Report) .

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