MGI Begins Cash-to-Account in China - Analyst Blog
December 09 2011 - 12:36PM
Zacks
In an effort to spreading into China, yesterday
MoneyGram International Inc. (MGI) announced the
launch of cash-to-account service with Industrial and Commercial
Bank of China (ICBC) – a leading Chinese bank – to make money
transfers across China.
The company already offers money transfer services to ICBC’s
1,500 locations in over 400 cities. Meanwhile, the cash-to-account
service will also be available to more than 269 million personal
banking customers of ICBC.
Initially, the service will be offered to MoneyGram’s extensive
locations that have vast population of Chinese itinerants and
immigrants of the country. Additionally, the service of sending
money directly to ICBC accounts has been made available to about 20
global markets, comprising the US, UK, Greece, Germany, Hong Kong,
Australia and Japan.
After the successful initiation of the cash-to-account service
in select agent locations of Poland, Mexico and the Philippines,
MoneyGram now aims to expand its services in China through ICBC.
China is said to be the second largest global money transfer
receiver with the receipt of more than $51 billion in remittances
from all over the world in 2010, according to World Bank.
The cash-to-account service further strengthens the company’s
business relationship with ICBC, which has been working together
since 1995 as MoneyGram’s cash payout agent. ICBC even believes
that this additional service will better help the bank to offer
easy and convenient money transfer solutions to its customers
across the globe.
On the flip side, the new service is not only expected to
enhance MoneyGram’s operating efficiencies in China but will also
give a fillip to extend its operations to more and more Chinese
living outside the country. Besides, the company also foresees huge
opportunity in the region, which will help to boost its competitive
leverage against its arch rival Western Union Co.
(WU).
Currently, MoneyGram carries a Zacks #1 Rank, which translates
into a short-term Strong Buy rating. However, based on its strong
fundamentals, we are maintaining our long-term Outperform
recommendation on the shares.
MONEYGRAM INTL (MGI): Free Stock Analysis Report
WESTERN UNION (WU): Free Stock Analysis Report
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