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MoneyGram Business Model: How This Transfer Service Mints Money

MoneyGram is a renowned money-transfer company. It has its headquarters in Dallas, Texas and it offers P2P payment solutions across the globe. The company manages two types of businesses i.e. Financial Paper Products and Global Funds Transfers. 

Moneygram primarily earns revenue by charging fixed fees for their cash pickup services. It also makes a profit from the daily changing foreign exchange rate.

Demands for P2P payments have increased rapidly with the advent of online businesses. Many money-transfer companies have emerged to meet the growing online money transfer needs. MoneyGram is one of the oldest among those companies. Its user-centric approach has made it quite a popular choice for regular transactions.

This post reveals MoneyGram’s business model, products, and customers. You will learn how this cross-border P2P money transfer company became so successful. 

What is MoneyGram?

Being one of the leading cross-border P2P money transfer companies, MoneyGram serves both individuals and businesses. It uses a sophisticated network of financial institutions and agents to provide its services. 

They help users in sending and receiving money from local and international sources. The money sender needs to initiate the transfer from MonayGram’s POS to carry out the operation. The user can directly pay from his account or use cash to transfer the required sum of money. 

The company was founded in 1988 as a branch of the Integrated Payment System at that time. Travelers Express acquired them and made it MoneyGram International. MoneyGram Payment Systems had a share of 52% when this company started offering money-transfer solutions. Thomas Cook Group held the remaining shares at that time. 

Moneygram had also become the second-largest money transfer service provider in 2014 and currently has clients in over 200 countries. It has more than 347,000 agent offices across the globe, making it one of the market leaders in the current scenario. 

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MoneyGram History

MoneyGram was a subsidiary of Integrated Payment System. Travelers acquired it in 1998 and thus it became an independent company. MoneyGram International was founded when Travelers Express and Integrated Payment Systems were merged to become one business organization. 

Travelers Express Co. Inc. was created in 1940 and its headquarters were in Minneapolis. The Greyhound Corporation had acquired Travelers Express in 1965 and became the USA’s largest money orders service provider the very same year.

Integrated Payment Systems had established MoneyGram in 1988. It was just a branch of the First Data Corporation. This company had sold Integrated Payment Systems in order to complete the merger with First Financial in 1992. 

Thomas Cook Global Foreign Exchange wanted to introduce a re-engineered money transfer solution in 1994, which came out as MoneyGram. Recently sold Integrated Payment Systems had become the USA’s second-largest money transfer company. It was also renamed as MoneyGram Payment Systems Inc. before becoming a publically traded company. 

James F. Calvano was the former president of Western Union, who took the responsibility of the newly branded MoneyGram Payment Systems CEO. This company was serving clients across 22,000 locations in 100 countries by the end of the century. It was expanding pretty fast and serving millions of clients by that time. 

MoneyGram Payment Systems Inc. and Thomas Cook had created MoneyGram International Ltd. in 1997. It went public in 1998 and 51% shares of the company were owned by MoneyGram Payment Systems.  

Today, MoneyGram serves across 200 countries and entertains millions of customers. It has launched many new products till now and found loyal customers across the globe to sell those products. 

How does MoneyGram work?

MoneyGram offers payment and money-transfer services. Consumers use this company’s services to pay bills, transfer funds, and send money orders. Clients, who do not use or have a bank account, can use this firm’s services to transfer money. 

MoneyGram has served over 150 million customers within the last five years. Such a huge number of clients choose this company because it provides money transfer services at all kinds of locations. You can use this company’s services at supermarkets, pharmacies, small businesses, check-cashing outlets, bust stations, train stations, etc. 

Being a global service provider, MoneyGram has its outlets at more than 350,000 locations in 200 countries. However, customers cannot initiate transactions from all 200 countries. Users from the USA and a few other countries are allowed to initiate MoneyGram transactions. 

How to initiate payment?

You have to go to the MoneyGram branch office and complete the required paperwork to initiate payment. You can also complete the paperwork online and submit it for faster service. The service provider will accept the payment through your debit card, credit card, bank transfer, or you can pay cash. MoneyGram charges some additional fees to provide the money transfer service. The fee depends on the location where you want to transfer the money. 

This company’s services are quite identical to banks, but it won’t hand over the money to the recipient. First, you have to deposit the money and then MoneyGram will send a notification. Once you have deposited the money and received a number, share it with the recipient. The recipient can now withdraw the money. 

Suppose you are the recipient, you will have to wait for a few hours once the money is deposited. Go to the local MoneyGram branch, use the number shared by the money sender, and then retrieve your money. 

Your local outlet may ask for identification to ensure the right recipient is withdrawing the money. So, carry an identity card issued by your local government to prove you are the recipient. 

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MoneyGram Services

MoneyGram offers the following services:

Money transfer:

The company allows users to transfer money across the globe. It charges a certain fee on each money transfer and that fee depends on the amount of money you are transferring. There is a limit on how much money a user can transfer through MoneyGram daily, weekly, monthly, and yearly basis. 

Money transfer limits can change due to security needs, market fluctuation, and regulations set by the local government. Customers cannot access the list of limits because it is different in each country. MoneyGram provides well-trained customer executives to help users when they face problems related to limit error. Customer executives offer an instant solution to resolve the issue. 

They are constantly improving their services by using the latest technologies. Customers used to go to local MoneyGram outlets to send money in the past. Now, senders can send the money online with a single click through their bank account. 

The company also allows its clients to automate recurring payments. The recipient will receive weekly or monthly payments from the linked bank account without any need for reminders. This automated payment solution is used by thousands of users, who frequently send money to various locations across the globe. 

A user can send up to $10,000 per online transfer. If the amount of money is much larger than the online limit, the user will have to transfer funds through the local MoneyGram agent. 

Most MoneyGram clients use its official website and smartphone application to access its services. A major chunk of users also frequents the app to make their day-to-day utility bill payments. This platform is quite reliable when it comes to making routine bill payments and instant payments. 

Enterprise clients use MoneyGram’s core capabilities to serve other clients. MoneyGram is also used as a service to provide money transfer solutions and other financial services. 

Financial papers

MoneyGram is the world’s 2nd largest supplier of money orders. Even though money orders aren’t as common as they used to be in the past, MoneyGram still serves clients for this specific need. 

It also offers support for official check outsourcing. Official checks are only available for financial institutes located in the USA. A customer uses an official check whenever the bank requires the payee to make the payment via a Check.  


MoneyGram is working with Coinme to help customers buy and exchange Bitcoin. This service is available at MoneyGram retail locations and investors can use US dollars to buy and exchange cryptos. 

MoneyGram Business Model

MoneyGram relies upon API-driven infrastructure to enable cross-border P2P money transfers and payments. There are two departments, Global Funds Transfer and Financial Paper Products that manage the core operations of this company.  

MoneyGram provides its services through third-party agents, which include 

  • Retail chains
  • Post offices
  • Independent retailers 
  • Banks 
  • Other financial institutions

MoneyGram’s Financial Paper Products department manages cash orders sent by customers across the globe. The company’s agents serve clients for their request of money order transfer. 

You must be wondering how this company has become one of the leading P2P money transfer and payments service providers. In fact, it is believed to be the world’s 2nd largest money transfer service provider. 

The secret to their success is their huge sophisticated network spread across the entire globe! MoneyGram serves everywhere and it makes transferring funds much easier than lengthy procedures of banks. 

While competing firms were focused on generating profit, MoneyGram was focusing on serving clients. It has frequently improved its services and added new products to entertain more clients. Affordable fees, higher limits, and user-friendly operations make MoneyGram quite useful for all sorts of customers. 

You can use MoneyGram to send or receive cash anytime and anywhere. Therefore, it’s quite popular and clients consider it the most reliable money transfer service. 

How does MoneyGram generate profit?

MoneyGram generates its profit from the exchange rate. This company makes a commission on each money transfer. Whenever users transfer money from one currency to another, MoneyGram charges certain fees and also earns through the exchange rate. While other companies do not reveal the actual value of the currency, MoneyGram provides complete information on the transaction. 

It has thousands of outlets and it serves millions of customers regularly. Thus, it earns profit from every money transfer, money order, and check. It charges a fixed fee for using its products and a user cannot proceed without paying that fee. 

Since MoneyGram is globally recognized for its services, it provides money transfer solutions in all countries across the globe. It has emerged as a reliable and innovative money transfer service. That’s why customers are also choosing its digital payment solutions. 

Why do consumers trust MoneyGram?

Consumers trust MoneyGram due to the following reasons:

  • It’s got industry’s leading digital capabilities

This money transfer service provider is offering digital solutions in more than 70 countries. Clients now use the mobile app to send and receive money. The same app is used for making payments. Thus, money transfer has become quite a simple task with MoneyGram. 

  • Reliable in-store services

MoneyGram agents serve across 380,000 locations across the globe. Its employees and seamless kiosk outlets allow users to deposit funds and transfer to the intended destination. 

  • Secure accounts and mobile wallets

MoneyGram tries to help clients access their money quickly and safely. Therefore, it offers a network of secure digital wallets, virtual accounts, and bank accounts. Clients use these facilities to withdraw money quickly and use it. 


MoneyGram is constantly improving its services to make money transfer much easier for customers. Its user-friendly web portal and application make it super easy to send or receive money. Therefore, more and more new clients are switching to MoneyGram and the company is making more profit.