MoneyGram Needs to Accelerate Digital Initiatives
15 de Noviembre, 2018
Tiempo estimado de lectura: 3 minutos
- MoneyGram continues to see declines in overall revenue. Overall revenue reached $347.2 million in Q3 2018, marking a 12% annual decline on a constant currency basis. That’s a larger decline than the firm saw last year, when its overall volume declined by 4% annually in Q3 2017, but only a slight sequential decline from its 11% decline in Q2 2018.
- And digital revenue is still outpacing overall revenue, but at a slower rate. Digital revenue — which represents 16% of total money transfer revenue — grew by 3% annually, representing a deceleration from the 6% digital growth the firm saw in Q3 2017. These results also mark a sequential deceleration from the 17% annual growth the firm’s digital segment saw in Q2 2018.
These results reflect an ongoing trend in the remittance industry as preferences shift to digital. MoneyGram’s primary competitor, Western Union, saw its overall revenue grow by 2% in Q3 2018 while its digital segment revenue grew by 20% year-over-year (YoY). The firms are facing growing threats from the influx of digital-first providers, which are able to undercut them on pricing and offer digital capabilities that consumers want, making their offerings more competitive.
MoneyGram needs to focus on accelerating growth in its digital channels while mitigating losses and preventing further declines in revenue. And the firm has been making efforts to boost its digital channels: MoneyGram CEO Alex Holmes noted that the firm marked a digital transformation “milestone” by expanding its online service to more countries and launching the MoneyGram app in Europe.
And MoneyGram will also need to prioritize its compliance. MoneyGram reached a settlement to pay the Federal Trade Commission a $125 million fine for allegedly failing to effectively prevent money laundering after a 2009 order to do so, according to The Wall Street Journal. The firm said that it invested more than $100 million in compliance technology in 2012 and implemented new verification standards. It’s imperative for remittance providers to comply with regulations or they can risk not only losing millions in fines but also damaging their brand reputation, in turn losing volume from customers if their network is perceived as unsafe. Fuente: Business Insider
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