Monday, September 19, 2011

MoneyGram expanding in Africa

MoneyGram International was working on aggressive expansion plans in Africa, which had significant growth potential, the second-largest money transfer company said yesterday. 

MoneyGram said it had quadrupled its network in Africa in the past five years to 12 300 offices on the continent. 

South Africa was in the top four sending and receiving countries at the company, which has a network of 227 000 agents in 190 countries. MoneyGram works with agents at Bidvest Bank and Standard Bank.
MoneyGram said it hoped to grow the money sent abroad by Africans by $500 million (R3.3 billion) to $22bn by the end of the current year and to $24bn in 2012. 

Anton Luttig, the regional director of MoneyGram East Africa, said customers sent an average of $300 a month to their families, which was mostly used for basic needs. 

There is no limit to the amount that can be sent. 

“However, for security reasons, we recommend a limit of $10 000, but it varies with each country depending on its policies and security,” he said. 

MoneyGram is being investigated by state and federal regulators in the US for allegedly not taking adequate steps to prevent consumer fraud. 

However, MoneyGram chief executive Pamela Patsley said the fraudulent transactions that robbed US consumers of more than $80 million from 2004 to 2008 were not related to the company, as the scams took place at the destinations. 

“We have not been investigated for a situation where one sends money to someone they know and that transaction not happening,” she said, adding that MoneyGram had invested $4m on global training for agents to spot fraudsters. 

MoneyGram said since putting consumer fraud warnings on money transfer forms and conducting background checks on everybody who applied to become a MoneyGram agent, more than $22m in fraudulent transactions had been prevented, but the amount of these transactions – even though prevented – was alarming. 

Patsley said MoneyGram had a good reputation, had been in the industry for decades and was one of the biggest money transfer companies globally. 

“Also in Africa generally our agents are banks and bureaus, which is a (more) secure measure than the one we have in America and Europe.” 

Luttig said the company used post offices and big retailers as its agents in some African countries and in the US. 

He said the regulatory framework made it difficult for it to do the same in South Africa but the company was working on this.

Source: Business Report