MoneyGram is one of the largest payment transfer providers in the world, second only to Western Union. You’ll be hard pressed to find a nation-state that isn’t served by MoneyGram, subsequently illustrating its global mite.
Sending cash via MoneyGram is a service most commonly used by those looking to transfer money to the third world. However, as MoneyGram also permits bank account transfers, it’s potentially suited for developed economies too.
If you’re thinking about using MoneyGram to send or receive funds internationally, then be sure to read our comprehensive guide first. We’ll cover everything from fees, payment options, safety, how transfers work, and more.
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What is MoneyGram?
In its most basic form, MoneyGram is a payment transfer provider that facilitates international money transfers. Launched way back in 1940, the company is based in Dallas, Texas. Although other options do exist, the traditional process of sending money through MoneyGram is as follows.
- The sender will walk into their nearest MoneyGram store.
- After filling in a document outlining the payment instructions, the sender will hand over the cash to the MoneyGram agent.
- As the third party in the transaction, the agent will then authorize the transfer via the MoneyGram network.
- The receiver’s nearest MoneyGram kiosk will then get the all clear to release the funds.
- When the receiver walks into their local kiosk, they will show some identification, before the agents hands over the cash.
In return for facilitating the above transfer, MoneyGram receives a fee.
Although the above process sounds highly outdated, MoneyGram has a network of significant size.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 blue-chip company, this is no longer the case.
With an all-time high market capitalization of just under $1 billion in 2017, the company has since been on a downward spiral. At the time of writing in May 2019, the company has a market capitalization of just $189 million.
One of the key problems facing MoneyGram, and as we’ll discuss further down, is that there are now far easier, cheaper and more efficient ways of transferring money overseas. With that being said, the key segment of the market that MoneyGram is looking to hold on to is a remittance of funds to the third world and emerging economies.
This is because access to traditional banking services in remote locations are still somewhat limited, and thus, 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 a third party intermediary between senders and receivers. Although its main business model is facilitating cash transfers in-person, the company has since diversified into four other areas.
Notably, this includes sending money online, sending money directly to bank accounts, sending money to a mobile wallet, and perhaps, most interestingly, sending money to prison inmates!
Before breaking these key target markets down, let’s explore its most traditional model – in-person transfers.
- Your first port of call is to find your nearest MoneyGram location. There are in the region of 350,000 kiosks located across more than 200 nations, so you shouldn’t be too far from a kiosk.You can find your nearest MoneyGram kiosk here.
- Once you’ve located your nearest kiosk, you will need to visit the location in-person. You will be required to fill out a document regarding the money transfer you want to perform.This will include your full name, the name of the recipient, the recipient’s location, and the amount that you want to send, plus fees.
- In order to comply with AML (Anti-Money Laundering) and KYC (Know-Your-Customer) regulations, the MoneyGram agent will need to take a copy of your government issued ID.This can be a passport, driving license or national ID card.Once you hand over the transfer amount in cash, the MoneyGram agent will give you an 8 digit PIN number.
- You will then need to give the 8-digit PIN number to the person you are sending the money too. Depending on the location receiving the money, the transfer can take as little as 10 minutes to process.
- The recipient will then need to visit their local MoneyGram kiosk, hand over the 8-digit PIN number and the amount that was transferred. They will also need to present some identification, so make sure this matches the information you put on the original form.Finally, once the receiving agent confirms the transfer, the recipient will be handed the cash.
If you don’t feel like visiting your local MoneyGram kiosk in-person, you can instead transfer funds online. The process is largely the same as the in-person method, insofar that you will need to fill in an online form detailing information about you and the receiver, as well as the amount being transferred.
In terms of payment options, you can use either a debit or credit card, with MoneyGram accepting Visa and MasterCard only. Take note, if you are using a credit card to transfer funds, it is likely that your credit card company will categorize the transaction as a cash advance.
Alternatively, if you are based in the U.S. and sending money overseas, you can use a domestic checking account.
MoneyGram will attempt to verify your information online by using third-party sources. However, if they are unable to do this, your payment will remain on hold. It is likely that the team at MoneyGram will contact you via telephone in an attempt to verify your information.
Once your details have been confirmed, you will be given an 8-digit PIN number, which you’ll then need to pass on to the receiver.
Transfer to a Bank Account
MoneyGram also allows you to send money directly into the receivers bank account. You can do this both online and in-person. However, the fees are somewhat expensive when performing a bank transfer via MoneyGram, so we would 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 payments industry is booming.
Examples of supported 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’re based in the U.S. and would like to send money to an inmate, you can now do this via MoneyGram.
Supported correction facilities includes the Texas Department of Criminal Justice, Florida Department of Corrections, California Department of Corrections and Federal Bureau of Prisons.
The sending process works in the same way as the other MoneyGram services we have discussed, although you will need to supply the inmate’s correctional ID.
While MoneyGram is proficient 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’ answer to this, as fees can and will depend on a number of factors.
- The location that you are sending the funds to
- The type of payment transfer you opt for (in-person, online, etc.)
- The number of funds that you are sending
- Whether the transfer requires more than one currency
The best way to break the fees down is to look at a couple of examples.
Firstly, if you were to send £500 from the UK at an in-person kiosk to somebody in Vietnam, you would pay a fee of £17.90. Sending the same transfer online would cost £8 in fees. Using a specialist online transfer provider like TransferWise would cost significantly lower.
In a second example, sending £500 from the UK to a receiver in Kenya would cost £18.99 in fees if you were to process the transfer in-person.
The very same MoneyGram transfer online would cost just £6.90.
As such, it appears that using the in-person MoneyGram service is substantially higher than transferring the money online.
This ambiguity in pricing is further amplified by Investopedia, who state that:
“MoneyGram’s rates for international money transfers do not appear to be much simpler than those of Western Union. You can transfer $500 to Mexico, using a credit or debit card, for a $9.99 fee, but the same transaction costs $31.00 if the money is picked up in Ireland, and $49.99 if it goes to China.”
Therefore, the only way to truly ascertain whether a MoneyGram transfer is financially viable for your chosen destination, amount, and preferred payment method, is to use the MoneyGram pricing calculator.
MoneyGram Exchange Rates
If you are looking to use MoneyGram to send funds overseas, then it is likely that you will need to make some considerations regarding exchange rates. The exchange rates implemented by MoneyGram can vary widely. In most cases, this will depend on the specific currencies being used in the transfer.
For example, if you are utilizing two major currencies – such as GBP, EUR or USD, then you can expect the rates to be more favorable. On the other hand, if you are sending money to an emerging nation, and thus, require the usage of an exotic currency such as the Kenyan Shilling, then expect to pay higher fees.
Much like in the case of its transfer fees, MoneyGram is somewhat opaque when it comes to the exchange rates that they use. They essentially bundle this within their ‘all-in’ transfer rate, which again, varies depending on the previously discussed factors.
Upon delving deeper into the terms and conditions of MoneyGram, it appears that the provider charges a variable rate above that of the mid-market rate. Third party sources claim that this can be as high as 5%, which is extremely expensive.
When looking at key competitors of MoneyGram, the likes of OFX are much more transparent when it comes to exchanging rates. Specifically, OFX charges an average of just 0.4% above the mid-market rate.
So now that we’ve discussed pricing, in the next part of our MoneyGram review we are going to explore whether the payment provider is safe.
Is MoneyGram Safe?
MoneyGram is an established money transfer provider with a track record that spans seven decades. In terms of the company’s regulatory status, MoneyGram is regulated and authorized by the UK’s Financial Conduct Authority (FCA) as a money transfer service provider. In this respect, using MoneyGram for your international remittance needs is as safe and secure as it gets.
However, much like in the case of its Western Union counterpart, MoneyGram is used widely by scam artists as their preferred payment method. The key reason for this is that once the funds have been sent, and subsequently collected, there is no recourse in the event of fraud.
Moreover, even if you take the matter up with your local Police authority, there is little that they will be able to do, not least because of the trans-national nature of the crime.
This is somewhat interesting, not least because the receiver is required to provide the MoneyGram collection agent with a suitable form of ID. However, whether this is enforced in emerging nations – especially those based in rural locations, remains to be seen.
Ultimately, if you are ever requested to a send payment to an unknown third party via MoneyGram, you should tread with extreme caution. Such a scenario is even used by rogue landlords who request payment up front via MoneyGram, prior to the end-user actually viewing the property.
MoneyGram Mobile App
MoneyGram now offers its user a native mobile application which is available to download for free via both the Android and iTunes store. The application works in much the same way as the online version. Users can send funds, upload a payment method, find their nearest MoneyGram agent, check previously sent transfers, and more.
The app previously had a poor rating on the iTunes store but it looks like they have fixed the issues as it now has a good 4.8 rating out of 5.
How Long do MoneyGram Transfers Take?
One of the best aspects of using MoneyGram for your international transfer requirements is that processing times are usually very quick. Once again, this can vary depending on a number of factors, such as the location, and whether you are performing an in-person or online transfer.
Nevertheless, in the vast majority of cases, in-person transfers are usually received by the end-user within just 10 minutes. This makes it significantly faster than most other money transfer services that rely on a bank-to-bank system. However, as noted earlier, in-person transfers are much more expensive than paying online.
On the other hand, MoneyGram transfers that are processed online, although a bit slower, are sometimes received within a few hours.
The great thing about sending funds online via MoneyGram is that you can trace the end-to-end transaction. As such, you can estimate how long it will take for the funds to arrive in the receiver’s bank account.
So now that we’ve covered estimated transfer times, in the next part of our MoneyGram review we are going to see what other services the company offers.
What Other Services Does MoneyGram Offer?
Although the vast bulk of the MoneyGram business model is centered on international money transfers, the company is also involved in other products and services. The key reason for this is that the MoneyGram management team recognized that they need to diversify in order to react to more cost-effective market competitors.
Pay Bills via MoneyGram
One of the fastest growing MoneyGram side-services is that of its online bill payment offering. The service can be used to pay bills across thousands of companies, including utility and phone companies, government agencies, and even healthcare providers.
In order to pay a bill via MoneyGram, you need to provide the company’s name, and your specific account number (linked to the bill issuer).
If paying online, you can use either a debit or credit card. However, if you have access to traditional debit/credit cards, it remains to be seen why you would want to use a third party like MoneyGram, especially when one considers that the fees are going to be much higher.
On the other hand, if you don’t have access to a bank card, then the MoneyGram bill payment service is ideal, as you can settle outstanding invoices in-person at a MoneyGram kiosk.
MoneyGram Money Order
If you need to send somebody a domestic payment and don’t want to perform a bank transfer, then you can utilize the MoneyGram Money Order service. In a nutshell, all you need to do is walk into your local MoneyGram store, hand over the required amount in cash, and then MoneyGram will provide you with a physical Money Order.
Such a service is also useful for those that do not have access to a traditional bank account. Unlike checks, Money Orders can be cashed at a full range of locations, such as a post office, or another MoneyGram location (domestic only).
Pre-Paid Card Top-Up via MoneyGram
If you are currently using a pre-paid debit card, then you’ll be pleased to know that you can use MoneyGram to load your card up. This is especially useful if you are looking to use your pre-paid card for an upcoming holiday, and need to add some additional funds to your card.
You won’t be able to do this online, so you’ll need to visit your nearest MoneyGram kiosk.
All you need to do is bring your pre-paid card into the MoneyGram store, pay the agent your required top-up amount (plus fees), and then MoneyGram will process the transaction on your behalf. Some MoneyGram locations also accept debit card deposits for the pre-paid card top-up service.
MoneyGram Mobile Top-Up
An additional service offered by MoneyGram is that of its mobile top-up facility. MoneyGram supports more than 350 different mobile service providers located in over 100 nations.
Although this wouldn’t really be suitable for topping up a domestic phone number, the service is great if you want to top-up the mobile of a family member or friend located overseas. MoneyGram claims that the end user usually receives the top-up within a few minutes, which is really efficient.
You won’t be able to use this particular MoneyGram service in-store, so you’ll need to do it online.
All you need to do is enter the receivers mobile phone provider, their mobile number, and then pay with a debit or credit card. Don’t forget, 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 the best part of seven decades. In fact, they sit just below Western Union as the largest money transfer service provider in the world. With more than 350,000 MoneyGram agents located across over 200 countries, you’re never too far away from a supported kiosk.
However, the key issue with a service like MoneyGram is that the company now faces fierce competition from more modern international remittance providers that utilize more efficient processes.
As such, if you are looking to perform an international bank-to-bank transfer, you might be better off using an alternative provider like OFX or TransferWise. Not only will this be cheaper, but in most cases, faster.
On the other hand, MoneyGram excels in its in-person transfer service, which forms the core root of its business model. If you need to send funds to somebody located in an emerging or first world nation that doesn’t have access to a traditional bank account, then the in-person option is ideal.
Arguably the service is more expensive than utilizing a bank-to-bank transfer, however, funds are usually received in less than 10 minutes.