MoneyGram (MGI) Boosts Money Transfer In China Via PSBC
Zacks Investment Research | Nov 09, 2017 08:30PM ET
MoneyGram International Inc. (NASDAQ:MGI) will provide its international money transfer services via the mobile application of Postal Savings Bank of China ("PSBC"), the country’s leading retail bank.
About the New Service
The latest service allows PSBC's 160 million mobile banking customers to transfer money anytime and anywhere on a mobile device via MoneyGram.
Customers can either visit one of PSBC's physical locations or log in to the bank's mobile application in order to make an international money transfer. MoneyGram enables transactions through U.S. dollar, euro, pounds and Australian dollar.
Markedly, this new facility is build upon the existing relationship between MoneyGram and Postal Savings Bank of China, which partnered in 2014 for the first time. The alliance allowed PSBC customers to transfer money via MoneyGram.
Why China?
China appears to be an attractive market for MoneyGram given the large number of Internet and mobile device users.
According to the China Internet Network Information Center ("CNNIC"), almost 700 million of population was mobile internet users in 2016, with over 95% using a mobile device to access the internet. The region has a low penetration rate of 53% and thus gives ample scope of internet adoption over the coming years.
Also, dynamic factors such as rising migrations both domestically and internationally and employment of effective and efficient policies by the government of China make room for growth in the country.
Going forward, MoneyGram intends to expand in China. Also Asia is expected to be the top destination for global remittances. In fact, the region is anticipated to become a powerhouse because of the economic boom and the development in science and technology.
Additionally, China is one of the major receive locations in South East Asia. It has always been an important market for remittance considering the volume of the country’s overseas migrants. The country also qualifies as the second-largest receive country in the world.
According to the World Bank, China received remittance amounting to $61 billion in 2016.
Another company in the same space, Western Union Co. (NYSE:WU) , also has a presence in China via tie up with Bank of China.
Share Price Performance
So far this year, shares of MoneyGram have gained 21%, substantially outperforming a 14% growth by the Original post
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