2 financial services giants; Visa in the payments space, and MoneyGram in the overseas money transfer sector; are set to join forces to further streamline the process for consumers of sending funds overseas.
Visa Direct is Visa’s payments platform for both businesses; who can carry out funds disbursements such as refunds, payouts, or loan distributions; and individuals, who can use the platform to make person-to-person payments, split bill payments, pay contractors, or send funds or remittances direct to another person’s account.
The partnership with MoneyGram; the world’s second largest provider of money transfer services; is the first time that Visa Direct will be enabled for sending money abroad from within the US, according to a joint press release issued by both companies. Initially, the partnership will focus on just 2 remittance corridors: US to Mexico, and US to Philippines, with the intention being to roll out the service to additional markets in due course. MoneyGram currently allows its customers to send money to more than 200 different countries either via their desktop PC, smartphones, or at one of the company’s physical stores.
Alex Holmes, MoneyGram’s chairman and CEO, says that “the service is another example of how MoneyGram is delivering a true omnichannel experience – giving customers’ choice to transact any way and anywhere they want.” MoneyGram customers will be given the option to use Visa Direct’s push payments service; which provides security, speed, and a simple user interface, whenever it is available.
Cecilia Frew, senior vice president and head of North America Push Payments at Visa also commented “by pairing Visa Direct’s push payments technology with MoneyGram’s expansive network, we are giving consumers a more convenient payment choice when sending money to their loved ones around the world.”
This month, MoneyGram also announced that it was rolling out its digital money transfer platform in 5 new countries: Australia, the Netherlands, Belgium, Portugal and Austria. The company announced in April that it would power an international money transfer service provided by Walmart, the American supermarket chain, called Walmart2World.
In January, MoneyGram also said that it would commence trials with Ripple XRP, the California based blockchain based payments platform that aims to reduce the costs of sending money abroad and speed up transaction times to a matter of seconds.
At the very start of the year, the US government blocked a proposed takeover of MoneyGram by Ant Financial, a financial services subsidiary of Alibaba, the online shopping service, on the grounds that ceding control of such a large business to a Chinese country was contrary to national interests. The deal was said to be worth $1.2bn and involved Jack Ma, Ant Financial and Alibaba’s Chief Executive and founder, personally visiting US President Donald Trump and pledging to create 1 million jobs in the US.
It seems like the collapse of the deal has not stood in the way of MoneyGram continuing to break new ground within the money transfer industry. It will certainly be interesting to see whether the partnership with Visa hits the ground running and how quickly Visa enters new international remittance corridors besides US to Mexico and US to Philippines. Both are high volume markets, with US to Mexico said to cater for 13 million migrants and estimated to be worth some $73 billion.
To dominate on the global stage, however, MoneyGram and Visa will doubtless be looking at markets in Europe, Asia, and the subcontinent. The US is currently the largest sender of remittances in the world, with India the largest receiver, by some margin.
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