MoneyGram is one of the largest payment transfer providers in the world, second only to Western Union. It will be difficult to find a nation-state that is not served by MoneyGram, which later illustrates its global mite.
Sending cash through MoneyGram is a service most used by those looking to transfer money to the third world. However, as MoneyGram also allows bank account transfers, it is also potentially suitable for developed economies.
If you are thinking of using MoneyGram to send or receive funds internationally, be sure to read our complete guide first. We will cover everything from fees, payment options, security, how transfers work and more.
What is MoneyGram?
In its most basic form, MoneyGram is a payment transfer provider that facilitates international money transfers. Launched in 1940, the company is based in Dallas, Texas. Although there are other options, the traditional process of sending money through MoneyGram is as follows.
- The sender will enter your nearest MoneyGram store.
- After completing a document describing the payment instructions, the sender will deliver the cash to the MoneyGram agent.
- As a third party in the transaction, the agent will authorize the transfer through the MoneyGram network.
- The nearest MoneyGram kiosk of the recipient will have everything clear to release the funds.
- When the receiver enters your local kiosk, it will show some identification, before the agents deliver the cash.
In exchange for facilitating the previous transfer, MoneyGram receives a fee.
Although the above process seems very outdated, MoneyGram has a network of significant size. The organization claims to have more than 350,000 agents worldwide, serving more than 200 different countries. However, in terms of its status as a leading frontline company, this is no longer the case.
With an all-time high market capitalization of just under $ 1 billion in 2017, the company has been in a downward spiral. At the time of writing in May 2019, the company has a market capitalization of only $ 189 million.
One of the key problems facing MoneyGram and, as we will see later, is that there are now much easier, cheaper and more efficient ways to transfer money abroad. That said, the key segment of the market that MoneyGram is trying to retain is a remittance of funds to the third world and emerging economies.
This is because access to traditional banking services in remote locations is still somewhat limited and, therefore, MoneyGram still has a relatively strong presence.
So, now that you know what MoneyGram is, let's take a look at how the transfer process works in more detail.
How do MoneyGram transfers work?
As noted above, MoneyGram acts as an intermediary third party between senders and receivers. Although its main business model is to facilitate cash transfers in person, the company has since diversified into four other areas.
In particular, this includes sending money online, sending money directly to bank accounts, sending money to a mobile wallet and, most interestingly, sending money to inmates!
Before breaking down these key target markets, let's explore their more traditional model: transfers in person.
Transfers in person
- Your first port of call is to find your nearest MoneyGram location. There are 350,000 kiosks in the region located in more than 200 nations, so it should not be far from a kiosk. find your nearest MoneyGram kiosk here.
- Once you have located your nearest kiosk, you should visit the location in person. You will be asked to complete a document about the money transfer you wish to make. This will include your full name, the recipient's name, the recipient's location and the amount you wish to send, plus the fees.
- To comply with AML (Anti-Money Laundering) and KYC (Know-Your-Customer) regulations, the MoneyGram agent must carry a copy of his government-issued identification. It can be a passport, driver's license or national identification card. Once you give the amount of the transfer in cash, the MoneyGram agent will give you an 8-digit PIN number.
- Then, you must also provide the 8-digit PIN number to the person to whom you send the money. Depending on the location where the money is received, the transfer may take only 10 minutes to process.
- The recipient must visit their local MoneyGram kiosk, deliver the 8-digit PIN number and the amount that was transferred. They must also present some identification, so make sure it matches the information you entered in the original form. Finally, once the receiving agent confirms the transfer, the recipient will receive the cash.
If you don't want to visit your local MoneyGram kiosk in person, you can transfer funds online. The process is largely the same as the method in person, to the extent that you must complete an online form that details information about you and the recipient, as well as the amount that is transferred.
In terms of payment options, you can use a debit or credit card, and MoneyGram accepts only Visa and MasterCard. Take note, if you are using a credit card to transfer funds, your credit card company is likely to classify the transaction as a cash advance.
Alternatively, if you reside in the USA. UU. And send money abroad, you can use a domestic checking account.
MoneyGram will attempt to verify your information online using third-party sources. However, if they cannot do this, your payment will remain on hold. The MoneyGram team is likely to contact you by phone to verify your information.
Once your data has been confirmed, you will be given an 8-digit PIN number, which you must then pass to the recipient.
Transfer to a bank account
MoneyGram also allows you to send money directly to the recipient's bank account. You can do this online Y in person. However, the rates are somewhat expensive when a bank transfer is made through MoneyGram, so we suggest using an alternative provider.
Transfer to mobile wallet
A new option available to MoneyGram customers is to send money to a mobile wallet. This is especially popular in the third world, where the mobile payment industry is booming.
Examples of compatible MoneyGram wallets include M-Pesa (Tanzania and Kenya) and Econet (Zimbabwe). Once again, you can process a MoneyGram mobile wallet transfer online or in person.
Transfer to an inmate
If you reside in the USA UU. And you want to send money to an inmate, now you can do it through MoneyGram.
Correction facilities admitted include the Texas Department of Criminal Justice, the Florida Department of Corrections, the California Department of Corrections and the Federal Bureau of Prisons.
The submission process works in the same way as the other MoneyGram services we have discussed, although you must provide the inmate's correctional identification.
While MoneyGram is competent in the services it offers, one of the most important factors to consider is the fees it charges. There is no "one size fits all" response, as rates can and will depend on several factors.
- The location to which you are sending the funds
- The type of payment transfer you choose (in person, online, etc.)
- The number of funds you are sending.
- If the transfer requires more than one currency
The best way to break down rates is to look at a couple of examples.
First, if I sent £ 500 from the UK in a kiosk in person to someone in Vietnam, I would pay a fee of £ 17.90. Sending the same transfer online would cost £ 8 in fees. The use of an online transfer specialist provider like TransferWise would cost significantly less.
In a second example, sending £ 500 from the UK to a recipient in Kenya would cost £ 18.99 in fees if you had to process the transfer in person.
The same MoneyGram transfer online would cost only £ 6.90.
As such, it seems that using the MoneyGram service in person is substantially higher than transferring money online.
This ambiguity in prices is further amplified by Investopedia, who states that:
“The MoneyGram rates for international money transfers do not seem to be much simpler than those of Western Union. You can transfer $ 500 to Mexico, using a credit or debit card, for a fee of $ 9.99, but the same transaction costs $ 31.00 if the money is collected in Ireland, and $ 49.99 if you go to China. "
Therefore, the only way to really determine if a MoneyGram transfer is financially viable for the destination, the amount and the preferred payment method is to use the MoneyGram price calculator.
MoneyGram exchange rates
If you want to use MoneyGram to send funds abroad, you may have to take some considerations regarding exchange rates. The exchange rates implemented by MoneyGram can vary widely. In most cases, this will depend on the specific currencies that are used in the transfer.
For example, if you are using two main currencies, such as GBP, EUR or USD, you can expect the rates to be more favorable. On the other hand, if you are sending money to an emerging nation and, therefore, require the use of an exotic currency such as the Kenyan Shilling, then expect to pay higher fees.
As in the case of their transfer fees, MoneyGram is somewhat opaque when it comes to the exchange rates they use. Basically, they group this into their "all-inclusive" transfer rate, which again varies according to the factors discussed above.
By delving into MoneyGram's terms and conditions, it seems that the supplier charges a variable rate above the average market rate. Third source claim This can be as high as 5%, which is extremely expensive.
When looking at key MoneyGram competitors, the tastes of OFX are much more transparent when it comes to exchanging rates. Specifically, OFX charges an average of only 0.4% above the average market rate.
So, now that we have discussed prices, in the next part of our MoneyGram review we will explore whether the payment provider is safe.
Is MoneyGram safe?
MoneyGram is an established money transfer provider with a history spanning seven decades. In terms of the company's regulatory status, MoneyGram is regulated and authorized by the Financial Conduct Authority (FCA) of the United Kingdom as a money transfer service provider. In this sense, using MoneyGram for your international remittance needs is as safe as possible.
However, as in the case of its Western Union counterpart, MoneyGram is widely used by scammers as their preferred payment method. The key reason for this is that once the funds have been sent, and subsequently raised, there is no recourse in case of fraud.
Moreover, even if you take the matter to the local police authority, there is little they can do, especially due to the transnational nature of the crime.
This is an interesting thing, especially since the recipient must provide the MoneyGram collection agent with an appropriate form of identification. However, it remains to be seen if this applies to emerging nations, especially those located in rural areas.
Ultimately, if you are ever asked to send a payment to an unknown third party through MoneyGram, you must act with extreme caution. Such scenario is even used by dishonest owners who request payment in advance through MoneyGram, before the end user actually sees the property.
MoneyGram mobile application
MoneyGram now offers its users a native mobile application that is available to download for free through the Android and iTunes store. The application works very similar to the online version. Users can send funds, load a payment method, find their nearest MoneyGram agent, check previously sent transfers and more.
However, when investigating online reviews available in the public domain, it seems that the MoneyGram application is plagued with errors. With an iTunes rating of only 1.9 (out of 5), the general consensus is that the application is constantly frozen, forcing users to restart their money transfer process from the beginning.
How long does MoneyGram transfers take?
One of the best aspects of using MoneyGram for your international transfer requirements is that processing times are usually very fast. Again, this may vary depending on a number of factors, such as location and whether you are making a transfer in person or online.
However, in the vast majority of cases, the end user usually receives transfers in person in just 10 minutes. This makes it significantly faster than most other money transfer services that depend on a bank-to-bank system. However, as noted above, transfers in person are much more expensive than paying online.
On the other hand, MoneyGram transfers that are processed online, although a little slower, are sometimes received in a few hours.
The best thing about sending funds online through MoneyGram is that you can track the transaction from end to end. As such, you can estimate how long it will take for the funds to reach the recipient's bank account.
Now that we have covered the estimated transfer times, in the next part of our MoneyGram review we will see what other services the company offers.
What other services does MoneyGram offer?
Although the vast majority of MoneyGram's business model focuses on international money transfers, the company also participates in other products and services. The key reason for this is that the MoneyGram management team recognized that they need to diversify to react to more profitable market competitors.
Pay bills through MoneyGram
One of the fastest growing MoneyGram secondary services is its online bill payment offer. The service can be used to pay bills at thousands of companies, including utility and telephone companies, government agencies and even health care providers.
To pay an invoice through MoneyGram, you must provide the company name and your specific account number (linked to the issuer of the invoice).
If you pay online, you can use a debit or credit card. However, if you have access to traditional debit / credit cards, it remains to be seen why you would like to use a third party such as MoneyGram, especially when it is considered that the rates will be much higher.
On the other hand, if you do not have access to a bank card, then the MoneyGram bill payment service is ideal, since you can settle the outstanding invoices in person at a MoneyGram kiosk.
MoneyGram Money Order
If you need to send someone a national payment and you don't want to make a bank transfer, you can use the MoneyGram Money Order service. In a nutshell, all you need to do is enter your local MoneyGram store, deliver the required amount in cash, and then MoneyGram will provide you with a physical money order.
Such service is also useful for those who do not have access to a traditional bank account. Unlike checks, money orders can be cashed in a wide range of locations, such as a post office or another MoneyGram location (national only).
Prepaid card recharge through MoneyGram
If you are currently using a prepaid debit card, you will be pleased to know that you can use MoneyGram to charge your card. This is especially useful if you are looking to use your prepaid card for the next vacation and need to add some additional funds to your card.
You will not be able to do this online, so you should visit your nearest MoneyGram kiosk.
All you need to do is take your prepaid card to the MoneyGram store, pay the agent the required recharge amount (plus fees) and then MoneyGram will process the transaction on your behalf. Some MoneyGram locations also accept debit card deposits for prepaid card recharge service.
MoneyGram mobile recharge
An additional service offered by MoneyGram is its mobile recharge facility. MoneyGram is compatible with more than 350 different mobile service providers located in more than 100 countries.
Although this would not really be suitable for topping up a national phone number, the service is excellent if you want to recharge a relative or friend's mobile abroad. MoneyGram states that the end user generally receives the recharge in a few minutes, which is really efficient.
You cannot use this particular MoneyGram service in the store, so you must do it online.
All you need to do is enter the recipient's mobile phone provider, your mobile phone number and then pay by debit or credit card. Don't forget that if you use your credit card, your card issuer is likely to process this as a cash advance.
MoneyGram Review: The Verdict?
In summary, MoneyGram has been offering international remittance services for most of seven decades. In fact, they are located just below Western Union as the world's largest money transfer service provider. With more than 350,000 MoneyGram agents located in more than 200 countries, you'll never be too far from a compatible kiosk.
However, the key problem with a service like MoneyGram is that the company now faces fierce competition from more modern international remittance providers that use more efficient processes.
As such, if you are looking to make an international transfer from bank to bank, it is better to use an alternative provider such as OFX or TransferWise. This will not only be cheaper, but in most cases, faster.
On the other hand, MoneyGram excels in its transfer service in person, which is the central root of its business model. If you need to send funds to someone located in an emerging or first world nation that does not have access to a traditional bank account, then the option in person is ideal.
Arguably, the service is more expensive than using a bank-to-bank transfer, however, funds are generally received in less than 10 minutes.
- Very fast transfers
- Worldwide access
- Many payment options
- Payments in cash
- Long history and well established
- Rates may be high
- Rates vary widely
- Negative reviews online
Disclaimer: The opinions expressed herein are only those of the author, not those of any bank or credit card issuer and have not been reviewed, approved or endorsed by any of these entities.
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