MoneyGram reaches 50% digital transactions goal a year early in Q1 23

MoneyGram reaches 50% digital transactions goal a year early in Q1 23

MoneyGram quietly reported what may be its final full earnings as a public company this week, with the company seeing a 3.6% YoY increase in its money transfer revenue to $294.8m in Q1 2023. However, it has reached its target of 50% of transactions being digital for the first time – a full year ahead of its original 2024 goal. 

MoneyGram reaches digital target despite sluggish growth
Quarterly money transfer revenue, EBITDA margin & digital share, 2020-2023

Digital revenue remains a strong growth area for MoneyGram, climbing 30% YoY, and now accounts for 35% of all money transfer revenue – the first time it has passed a third. However, non-digital money transfers have seen much more muted growth and the company’s EBITDA is lower than a year ago, with its adjusted EBITDA for Q1 2023 being 14.07%, compared to Q1 2022’s 15.93%. Given the company is going private imminently, this is less of a concern than it would be otherwise, but it highlights the benefits of MoneyGram switching to a more long-term approach, where it can invest over several years without the need to show immediate returns.

The company did cite high levels of competition for both agents and customers as a “continuous challenge in 2023”, and also said that it expected to continue to see impacts from currency volatility, inflation, immigration restrictions and central bank liquidity pressure. It also expects to continue to see a shift away from cash.

In its filing, the company said that it expected to see continued digital transactions growth in 2023, alongside competitive pricing and an ongoing focus on customer experience and product diversification. With this in mind, it plans to invest in product development in order to “go deeper and wider in [its] consumer-direct digital offerings”, as well as expand MoneyGram Online with new countries, send partners and account deposit and wallet offerings. It also plans to continue its partnership with blockchain player Stellar to further develop blockchain-enabled settlement.

The company also provided an update on the completion of its merger with Madison Dearborn Partners, which has now received approval from the Reserve Bank of India. MoneyGram now expects the merger transaction to close on or before 1 June 2023.

How competitive is MoneyGram on speed of transfer?

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