The coronavirus pandemic has shaped a lot of businesses and closed quite a number. For instance, as more people adopted online payments, the money-transfer business has seen a tremendous decline in operations. The already established companies, like Western Union and MoneyGram, dealing in moving money around the world have been bitten hard.
MoneyGram, which has really struggled during the pandemic, has been forced to close operations around the globe. Even if you were to consider the digital transactions the company has been handling, they account for just 18% of its money transfers in the first quarter of 2020.
This is the key reason why Western Union is in takeover talks with MoneyGram. Bloomberg cited reliable sources stating that no decision has been made so far.
In Q1 of 2020, MoneyGram recorded an 8 percent drop in revenues YoY to $290.9 million with revenue from money transfer amounting to $255.9 million. Net loss was $21.5 million, including $10.1 million of additional non-cash tax expense from an increased deferred tax asset valuation allowance.
Money transfer to overseas markets is lucrative seeing that companies like Facebook through Libra Association are eyeing a piece of the pie.
MoneyGram had previously received an offer from China’s Ant Financial in 2017 but the deal failed to materialize.