FinTech: Western Union Is Looking to Acquire MoneyGram International
A Bloomberg report says Western Union has made a takeover offer for MoneyGram.
If the transaction succeeds, the two biggest players in the money transfer business in the US would combine. However, the matter is not yet officially public, and Bloomberg quoted a person who asked not to be identified. (Bloomberg)
Western Union (NYSE: WU) and MoneyGram (NASDAQ: MGI) did not respond to Bloomberg.
MoneyGram shares spike
Shares of MoneyGram ended Monday higher by 6.15% at $ 2.59. However, according to MarketWatch, the stock soared in after-hours trading, ending the extended session up 32% at $ 3.41 a share. The stock is up 23% year to date and 86% over the past year.
Western Union is down 23% year-to-date, closing Monday at $ 20.71, up 3.45%.
Two legacy players may combine to take advantage of digital sprint
During the COVID-19 crisis, both Western Union and MoneyGram International saw a sharp uptick in their digital payments businesses. According to Forbes, digital transactions at MoneyGram jumped to a share of 28% in April, up from 18% in the first quarter. At Western Union, digital transactions accounted for 32% of its consumer business in April.
“Putting that into perspective, that effectively putting four years of expected digital growth into just two months,” Forbes observed.
Fintechs, too, romped home with solid numbers during the virus months. WorldRemit reported 150% year-on-year growth in new customer sign-ups for March and April. Other digital players such as Remitly and Azimo reported jumps of 100% in month-on-month customer adds.
Meanwhile, Paypal (NASDAQ: PYPL) said April was its strongest month since its IPO. The payments giant added an average of 250,000 net new active accounts per day during this month.
MoneyGram: Second time lucky?
This will be the second time that MoneyGram is drawing acquisition interest. Earlier, in 2017, Ant Financial Services, the largest fintech in the world, agreed to buy the company. However, it withdrew from the deal after objections from national security regulators in the U.S.
However, a successful transaction may result in a rationalization of costs and a reduction in remittance charges – a long-cherished objective of financial regulators and governments. According to Bloomberg, it costs on average $ 6.79 to remit $ 100 overseas.
Related Story: April Was PayPal’s Strongest Month Since its IPO; “We will Hasten the Demise of Cash”
Latest Alternative Investment News
Artificial Intelligence: AMD Takes On Rivals In The AI Chip Sweepstakes
Chipmaker AMD (NASDAQ: AMD) has unveiled a range of innovative AI solutions spanning from data centers to personal computers. The AMD Instinct MI300 Series features data center AI accelerators, while…
Digital Assets: Robinhood Debuts Crypto Trading On Its App In The EU
Robinhood (NASDAQ: HOOD) has launched its Crypto app in the European Union (EU), allowing eligible customers to engage in crypto trading with the added incentive of earning Bitcoin rewards. Customers…
FinTech: Samsung Electronics Ties With Mastercard’s Wallet Express
Samsung Electronics (KRX: 005930) and Mastercard (NYSE: MA) have partnered to launch the Wallet Express program, offering banks and card issuers a cost-effective way to expand digital wallet offerings. Through…
Venture Capital: Revaia, Europe’s Biggest Female-Led VC Firm, Racks Up $160M For Second Fund
Revaia, Europe’s largest female-founded venture capital firm, has successfully raised €150 million ($160 million) for its second fund, Revaia Growth II. The funding was secured from sovereign wealth funds, family…