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MoneyGram (MGI) Boosts Middle East Network With urpay Deal

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·4-min read
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  • MGI
  • PYPL
  • ALRS

MoneyGram International, Inc. MGI recently announced that it is expanding its cross-border money transfer business by joining forces with Saudi Arabia's urpay. The move is expected to boost MoneyGram’s presence in the Middle East region.

Users of urpay, a digital wallet from financial global digital solutions company neoleap, based in Saudi Arabia, will be able to utilize MoneyGram’s massive network to send money. The deal brings in millions of urpay users under MoneyGram’s radar, thus boosting its international exposure. The partnership is anticipated to come online in the beginning of the next year.

The latest deal marks another win for MoneyGram’s API-driven infrastructure and worldwide network. Through this partnership, MGI, a leader in digital peer-to-peer payment evolution, is expected to capitalize on a massive remittance services market in the Middle East. More new deals in neighbouring countries can be expected from the company in the near future, further boosting its footprint in Asia. This positions the company for long-term growth.

MoneyGram’s total received digital transactions though the MoneyGram platform hit an all-time high in third quarter 2021, reflecting growth of 63% from the prior-year period. The latest deal with urpay is likely to stimulate the growth momentum. Given the stiff competition prevalent in the U.S market, the company’s focus on diversifying its revenue mix geographically to align with the global remittance market growth rate bodes well. Last month, it announced that it is expanding its mobile wallet network in Asia by joining forces with Bangladesh's mobile financial service provider, bKash. The deal was expected to bring in more than 55 million bKash users under MoneyGram’s radar.

Competition

MoneyGram is facing steep competition from peers like The Western Union Company WU, which joined forces with Cebuana Lhuillier in a bid to expand digital money transfer services across the Philippines, early-September. Western Union is rapidly investing in its digital platform to stay ahead in the fast-changing remittance market. The company anticipates constant currency revenue growth of around 3-4% for 2021 against a 3% decline in 2020. WU expects the operating margin to remain at 21.5% for this year, compared with 20.8% in 2020.

The remittance space is witnessing movements from fintech players like PayPal Holdings, Inc. PYPL. PayPal offers domestic and international person-to-person payment facilities with the help of PayPal and Xoom products. The company continues to gain solid traction in the global online payment market. In the Asia-Pacific region, PYPL is expanding its presence via its growing operations in Australia, Philippines and other countries. It enables customers to send payments in more than 200 markets globally. For 2021, PayPal anticipates revenues between $25.3 billion and $25.4 billion, indicating growth of 18% at current spot rates and 17% on a currency-neutral basis. Net new active accounts are expected to be 55 million in 2021.

Price Performance

MoneyGram’s shares have risen 17.7% in the past month against the 7.5% decline of the industry.

Zacks Investment Research
Zacks Investment Research

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Zacks Rank & Another Key Pick

MoneyGram currently sports a Zacks Rank #1 (Strong Buy). Another top-ranked player in the Finance space include Alerus Financial Corporation ALRS, which sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Based in Grand Forks, ND, Alerus Financial provides numerous financial services to clients. Its financial strength is reflected by massive total assets of $3.2 billion at the third quarter-end, which increased 5.4% for the first nine months of 2021. Rising investment securities are likely to keep boosting the company’s asset position in the coming quarters.

Alerus Financial’s bottom line for 2021 is expected to jump 11.5% year over year to $2.81 per share. It has witnessed three upward estimate revisions in the past 60 days and no movement in the opposite direction. ALRS beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 23.6%.


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MoneyGram International Inc. (MGI) : Free Stock Analysis Report

The Western Union Company (WU) : Free Stock Analysis Report

PayPal Holdings, Inc. (PYPL) : Free Stock Analysis Report

Alerus Financial (ALRS) : Free Stock Analysis Report

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