Expanding its presence in Vietnam, on Wednesday, MoneyGram International Inc. (MGI) introduced the first money transfer platform with DongA Bank in Vietnam. The company also launched other initiatives such as ‘Red Kiosks’ and home delivery in order to enhance its network in the region, which grew by 30% in 2010.
DongA Bank is a leading financial institution in Vietnam that offers MoneyGram services through its 252 countrywide locations. Additionally, MoneyGram has also tagged itself with other significant financial institutions in Vietnam such as Eximbank and Sacombank, which were added in 2010, as well as Vietcombank, VIB, and Saigon Bank, accounting for the 1500 countrywide locations for the company. This reflects the company’s strategy to strengthen its roots even in the developing economies.
The expansion is an attempt to tap the rapidly developing $400 billion global money transfer industry. In 2010, Vietnam received more than $7 billion in remittances, primarily sent from the US. Hence, MoneyGram intends to explore ample avenues in Vietnam for network expansion and transaction growth.
Money transfer business remains the driving force for MoneyGram. The company has been spreading its money transfer business across the globe through various recognized financial institutions.
Besides, MoneyGram continues to explore new growth avenues in untested locations by incorporating the latest and flexible technology that facilitates transfers through mobile phones, prepaid cards or ATMs, in order to speed up its money transfer services and enhance the remittance volumes. These efforts also help to boost the company’s competitive vigor, particularly against the steady global ramp of its arch-rival Western Union Co. (WU).
Although the current economic turmoil has weakened both the revenue growth and the operating leverage of MoneyGram, we believe that the company has the potential to overcome the impact of the volatile U.S. dollar against other currencies and additional losses in its investment portfolio, once the global economy rebounds to its historical highs.
MONEYGRAM INTL (MGI): Free Stock Analysis Report
WESTERN UNION (WU): Free Stock Analysis Report
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