MoneyGram Still Not Recovered From Walmart Loss

Based on MoneyGram’s first quarter earnings, it appears the money transfer service hasn’t quite recovered from the sting from the Walmart loss that came as a result of Walmart starting its own money service. The company also posted a $72 million profit loss on the quarter.

For the quarter, the company reported that money transfer transaction growth was flat, and revenue was down. Revenue for the quarter hit $286.8 million, which was a decrease of 12 percent, year over year. While its earnings report highlighted that its money transfer transactions increased 13 percent, that growth excluded transactions that originated at Walmart — which is what attributed to the flat transaction growth.

Outside of the U.S., money transfer services, however, are growing stronger. U.S. outbound transactions grew 15 percent, year over year, which the company reported was the 14th consecutive quarter for the company to report double-digital growth on the U.S. outbound transaction side. Non U.S. send transactions grew 14 percent, year over year, but in terms of transactions made within the U.S., those figures declined 37 percent. That decline has slowed since the fourth quarter of 2014, which was a 40 percent decline.

While the impact from Walmart has become somewhat muted each quarter, the impact is still felt on the transaction side. MoneyGram CEO Pamela Patsley spoke briefly about the Walmart impact during the company’s Q1 earnings call with analysts. Because Walmart accounted for 21 percent of the company, she said the “sequential improvement is just really the continuing awareness of MoneyGram‘s new prices that are available.” The change, however, Patsley said, is beginning to resonate with customers.

“Our transactions improved in the band where we changed pricing, that is, those over $200, but the overall improvement was somewhat muted by transaction decline in the less than $50 band at Walmart, however, that band is growing elsewhere,” she said, turning her comments toward the positives of the quarter. “Our average amount sent has increased 30 percent year-over-year as we are attracting higher dollar transactions to the MoneyGram offering.”