Indusage in Conversation with Moneygram CEO & CRO Alex Holmes & Grant Lines

I think for the remittance industry, or the money transfer industry, it's all to me around choice and convenience for the consumer. If you look at our Indian network, it has historically been based around the banking community and exchange houses led by Supreme Securities, UAE Exchange, and Thomas Cook, also with some strong network collaboration with WeRoth Finance. As the Indian diaspora has grown and working internationally, we have been working with retail partners such as WiseMen Forex to actually build out a retail network in states such as UP and Bihar to again offer more choice of convenience for our Indian customers.

Any thought on B2B? Now, I think that's an excellent question. I think when you look at MoneyGram, our core business is providing family remittance and supporting families who send funds home for loved ones, whether it's for emergency needs or whether it's perhaps for education. I think the market is very, very competitive, so from a pricing perspective, you have companies like MoneyGram, you have regional players, and you also have corridor specialists as well. So I think consumers in Australia, whether they're transacting through a physical network through MoneyGram or through an online digital platform, are in a very, very competitive market. So I think all consumers should feel good about the price-competitive nature of this industry. And then I think the strength of the brand, the trust, and the security is important. And I think it's also very important when you look at the physical payout network in India. And I think a mixture of the banks, the exchange houses, and particularly we're building out our retail network, is providing as much choice and convenience as we can, together with the ability to pay out into a bank account or, as Alex just mentioned, to one of the new wallets through the payment banks in India.

Yeah, absolutely. And I do think that high-dollar senders, high-value sender centers that are KYC that provide more information, they should get a better FX rate. And I think it just comes hand in hand with what we can do. And we want that type of service. And high-dollar transactors are just as good as others. But again, in our industry, when you start looking at P2P payments and large dollars come in, it's like, well, what is it? And that's what adds complexity to it.

I find it in our business particularly with anyone from South Asia, Indians in particular. You tell us when you're sending money because you guys are watching that rate all the time. Foreign exchange is an interesting thing to deal with, particularly under global scale. We actually have changed our Treasury operations to try to bring that service closer to the regions where we're actually transacting. So we had Treasury operations five years ago only based in the United States. Now we have Treasury operations in the United States, in Europe, and now in Singapore as well. So we're trying to get much more actively in the market, trading more actively, so that we can get things like the rupee at the best rate possible and give you the best rate in the market. We do have to deal with the currency fluctuations themselves, so the spread that we put on that exchange rate we try to make as competitive as possible because we know there's high demand for the service and a lot of competition. On the other hand, currency fluctuations are based on a lot of things – strengthening US dollar, things happening in India, things happening in Australia move the exchange rate around quite a bit. And we have to be sensitive to that, be able to react, because we recognize that consumers are opportunistic. They want to maximize that send home, particularly in the Indian diaspora you want to maximize that send, get as much money as you can for the value of your send. So having a good FX rate, making sure we understand what's happening with the market, and advertising that in a transparent way is really important to us.

I don't mind talking about it. Consumer fraud globally is one of the biggest challenges for our consumers, and not just consumers using money transfer, but consumers in any sector. And I think the proliferation of online communication unfortunately has actually added to the complexities around it. One of the single biggest things that we have to deal with are challenges of customer identification on the send and receive side, and trying to protect our consumers from fraud. It comes in many forms – there's elderly scams, there's person in need scams, romance scams. Over the last five years, we've been improving our compliance program and trying to put in new rules and new controls in place to slow that down. We've taken a lot of steps recently to try to lead the industry in terms of consumer protection through changes in terms of how much money people can send, how frequently they can send, registration requirements, identification information about consumers on both the sender and receive side. And we operate what we call an active interdiction list, meaning as soon as we know someone might be a scammer on the receive side, we try to block those consumers as much as possible. Consumer fraud as an industry has grown exponentially. In the US alone, elderly fraud is a 40 billion dollar industry. It's unbelievable. I'm very proud to say that MoneyGram's fraud rates are at six-year lows. As the rest of the world has gone up, ours have gone down. We unfortunately are dealing with the side effects of that, which is we get a lot of complaints from consumers about the new ID checks that we have and the new compliance controls. But all of that is being done to try to lead the industry and get fraud out of our system. Once you send, getting that money back is almost impossible once it's gone. So we've really increased our prevented fraud rates as well. We prevented something like 350 million dollars last year, which is incredible when you think about the size of our business. So we're very proud of those efforts, but it continues to be a problem. We work with law enforcement in numerous countries around the world. We try to educate, we try to be proactive on it, but it is a very, very difficult thing to do because as technology grows, not only do the scams proliferate and get bigger, the technology behind them allows them to expand as well. So it's a very sad thing, but it is something that we're trying very hard to lead the industry on. And that's where, coming back to brand affinity and trust and security – to be able to say that we have the lowest fraud rates, I think if you're a consumer who's concerned about sending money home and the security of your service, trusting someone like MoneyGram to provide that versus a new name or a startup that may look like they have a better rate or something today, that can lead to problems down the road. So we try to lead the industry in compliance, we're very passionate about it, we work very actively with regulators, I should track here in Australia. So it is a big challenge, it's something we're working very hard on, and I think we're doing a good job.