MoneyGram’s online business soars as digital transfers surge
- MoneyGram reported a surge in online transfer revenues in Q4.
- It can continue to use to its digital business arm to uplift overall business as the pandemic ensues.
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Transactions for the remittance firm’s online business, MoneyGram Online (MGO), exploded 100% year over year (YoY) in Q4, with the metric’s revenues growing 103% YoY—marking a slight deceleration from Q3 2020, when MGO’s transactions and revenues grew 111% and 114% YoY, respectively.
MoneyGram attributes its digital growth to strong consumer demand for the MoneyGram app, as well as high customer retention rates. Further, the company said that digital transactions accounted for 28% of all money transfers during Q4, up slightly from Q3 when it made up 27% of all transfers.
MoneyGram’s total money transfer revenues, which include in-person and digital remittances, reached $298.1 million, growing 2% YoY on a constant currency basis. This is down from the prior quarter but a major improvement from Q2, at the onset of the pandemic, when it plunged 9% YoY.
In Q4, MoneyGram’s overall business was driven up by its digital business arm—and Insider Intelligence believes that key partnerships forged in the period could propel it even further in the future.
- MoneyGram’s digital arm continues to uplift its overall business, which has been slow to grow. The firm’s overall business felt the impacts of the coronavirus pandemic because many consumers likely turned away from brick-and-mortar transfers. However, MoneyGram’s significant digital growth helped power up its total business, since more consumers leaned on its app and website to transfer funds—the firm said that a record number of digital customers turned to it in Q4—helping drive massive digital growth in November and December.
- The firm’s recent partnerships with Walmart and Visa likely helped boost business in Q4 and can position it for growth down the line. In October, MoneyGram extended its partnership with Walmart to allow customers to continue using its services in-store and on Walmart’s website—likely serving as a key growth channel, considering Walmart’s massive US and global scale. In its earnings report, MoneyGram also highlighted its expanded partnership with Visa, which enables it to provide quicker payment capabilities to its customers and expand its digital business in Europe. Both partnerships can help optimize MoneyGram’s business to better serve its in-person and digital customers down the line.
Going forward, MoneyGram’s digital business can position it for growth as the remittance industry bounces back from the coronavirus pandemic in 2021.
Early on in the crisis, the World Bank projected a 20% decline in global transfers. However, digital remittances helped offset this potential decline, as more consumers used digital remittances to send funds to loved ones abroad during these financially trying times: US remittances to Mexico rose 11% annually to reach $36.9 billion in the first 11 months of 2020, for example.
For MoneyGram, focusing efforts on its digital business—which was a key strategic focus for the firm prepandemic—can enable it to continue its growth trajectory, especially since the consumer shift to digital is expected to remain for many years to come.
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