MONEYGRAM AND VISA PARTNER ON CROSS-BORDER PAYMENTS: Visa is partnering with legacy remittance firm MoneyGram to launch real-time digital money transfers through Visa Direct, Visa’s push payment service that enables near-instant domestic and cross-border payments. The partnership gives MoneyGram customers the option to send and receive funds via a bank account attached to their Visa debit card or load the cash onto a Visa prepaid card, forgoing the need to go to a cash pickup location, though that option remains.
The partnership will go into effect in October in two “high priority” corridors:
- US to Mexico: Remittances to Mexico reached $31 billion in 2017, making it one of the largest recipient countries. The US-Mexico remittance corridor, specifically, is one of the largest in the world — consumers sent $30 billion from the US to Mexico last year — and it’s only poised to become more important as global remittance volume increases. This partnership will allow both firms to solidify their positions in the market as volume grows.
- US to the Philippines: The Philippines received $33 billion in remittances in 2017, making it the third-largest remittance-receiving market. Consumers in the US sent close to $12 billion to the Philippines last year, making it a significant corridor to the US’ overall remittance volume. Establishing a presence in another of the most active remittance markets will allow both firms to increase volume.
The addition of Visa Direct can help MoneyGram grow its revenue and remain at the forefront. MoneyGram’s revenue has been declining overall, and the firm missed out on what could have been a huge opportunity when Ant Financial’s proposed $1.2 billion buyout was rejected. But this partnership could facilitate more efficient transfers, which could boost volume, increase loyalty, and help the firm remain competitive. Real-time money transfers with flexible, electronic receive options could help MoneyGram compete with digital upstarts, which often undercut legacy firms on pricing and can be faster as well. Additionally, leveraging Visa Direct’s platform to give customers more disbursement options and make the process more convenient could be attractive to customers, in turn bringing in users or growing engagement from customers who might have turned to other options, thus improving MoneyGram’s stature. The partnership benefits Visa too, as it marks the first cross-border initiative for Visa Direct in the US, and the firms plan to expand the partnership to other markets as well. Access to MoneyGram’s 200-plus-corridor market could increase Visa Direct’s volume as the partnership scales, bring the service to new regions, and make customers more aware, in turn benefiting the firm.