Moneygram International, Inc. (MM) (NASDAQ:MGI)
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5 Years : From Jul 2012 to Jul 2017
Money-transfer company MoneyGram International (MGI) and payments-technology giant Visa Inc. (V) are partnering to offer a streamlined way for Mexican workers in the U.S. to send remittances back home to family members.
A funds transfer made through any of MoneyGram's 35,000 U.S. locations can now show up almost immediately in a Visa credit-card account or debit card account, and be used for purchases or ATM withdrawals, said Kelly Alpert, a senior business leader at Visa. The program is also offered through re-loadable Visa pre-paid cards.
The program comes on the success of MoneyGram's first cash-to-Visa service in Guatemala. It also comes on the increasing popularity of having remittances deposited in Mexican bank accounts and then transferred to Visa cards, Alpert said. "We've seen significant growth in that over the last two years," she said on Thursday.
Banks have increasingly become involved in the booming U.S.-to-Mexico remittance business, which in past decades often involved the physical distribution of cash to immigrant-worker families by go-betweens, or transfer-agency transactions that charged 10% or more of the remittance amount through fees and exchange-rate differentials. Competition has brought down the cost of sending money home in general.
Different financial institutions offer partnerships in which money deposited in a bank in the U.S. is transferred to an account in Mexico and becomes accessible through an ATM card.
Neither Visa nor MoneyGram outlined the cost to the consumer of the new program in a press statement announcing its launch on Wednesday.
According to Mexico's central bank, remittances from Mexicans living abroad rose 9.1% in December from the year-ago month to $1.71 billion, bringing full-year remittances to $21.27 billion. It was the first time those remittances rose since 2007.
Remittances picked up last year after a drop in 2008 and 2009, brought on by the U.S. recession and a rise in unemployment, particularly in areas such as construction where many migrant workers are employed.
Remittances, which reached a record $26 billion in 2007, are a major source of foreign currency inflows, generating more income than tourism but less than oil.
-By Laurence Iliff, Dow Jones Newswires; (52-55) 5980-5184, firstname.lastname@example.org