MoneyGram review: What you should know before you sign up

Currencies:

60

Transfer speed:

1 – 3 days

Trustpilot score:

1 star

Our score:

2 stars

Website:

moneygram.com

MoneyGram is provides a quick and flexible network for money transfer, but is expensive and has low value limits.

Over its history, MoneyGram has adapted its business model many times on its way to becoming the one of the most popular currency transfer services in the world. Its brand has fostered a lot of trust among the public at large for being a safe and reliable provider of domestic and international payments.

While the company is best known for allowing its customers to send money through its network of retail agents across the world, they are also adapting to the digital age. In addition to its retail services, MoneyGram has an online platform that facilitates electronic remittances by a variety of methods.

It’s pretty clear that MoneyGram is working hard to stay relevant in an industry that is quickly changing. To learn more about their capability and to see if their service is right for you, read on for my in-depth review of MoneyGram.

1. Company history and founding story
2. Supported currencies
3. Exchange rates and fees
4. Transfer speed
5. Key features
6. Customer service
7. Security and regulation
8. Reputation
9. User experience
10. Conclusion and final thoughts

1. Company history and founding story

MoneyGram, as we know it today, was formed in 1998 when two separate companies, Travelers Express and MoneyGram Payment Systems, were combined under common ownership. The scheme to marry the two firms was adopted by Viad Corp, a large conglomerate organisation, which is probably best known for operating the Greyhound bus service for many years.

Since the merger of the companies and the adoption of a single brand, MoneyGram has quickly became one of the largest providers of money transfer services in the world. It currently sits only second to Western Union (review) in terms of annual transfer volume on behalf of its customers. Then in 2004, Viad sold their interest in the service, and MoneyGram was eventually listed on the NASDAQ as a publicly traded company.

MoneyGram is currently led by Alex Holmes as CEO, who has over 10 years of experience in the company. He is supported by Larry Angelilli who acts as Chief Financial Officer, and Kamila Chytil who is Chief Operating Officer. Andres Villareal oversees all regulatory challenges as Chief Compliance Officer, while Aaron Henry has been appointed as General Counsel and also performs Corporate Secretarial duties.

2. Supported currencies

MoneyGram facilitates the transfer of 60 currencies, leading to a total servicing of approximately 200 countries. To support this extensive reach, the company has established a network of bank accounts, using a combination of international banking partners, as well its own locally based subsidiaries. In addition to bank transfer, the company can also deliver funds by other methods such as:

• Cash pickup
• Mobile money

MoneyGram does not have a minimum transfer value, and the maximum transfer value is limited to £4,600. In addition to limits on each transaction, you are also limited to aggregate transfers of £4,600 each month. For any values larger than this, you will need to approach one of MoneyGram’s retail agents to arrange an in-person transfer.

3. Exchange rates and fees

Before committing to using a currency transfer service, it’s important to understand its business model. Put simply, a company like MoneyGram typically generates revenue in two ways. Firstly, it may charge a transaction fee for executing each transfer. Secondly, it may also take a margin on the exchange rate provided to its customers, also known as the “spread”; which is the difference between the exchange rate of the wholesale market (i.e. the interbank rate), and the exchange rate offered to the customer.

When comparing the pricing of MoneyGram against traditional banks, the company fares slightly better. Banks typically charge a large transaction fee and a 5% margin on the total value of the transfer. MoneyGram’s fees are also rather high, costing between £5 – 85 for payments made by debit or credit card. The exchange rates are marginally more competitive than the banks, leading to the total cost of a transfer amounting to approximately 3.50% for both small (€250) and large values (€5,000).

When comparing MoneyGram to other specialised currency transfer services, it does not stack up very well at all. While currency services such as TransferWise (review) and CurrencyFair (review) do not take a margin on the value of the transfer, and rather they provide their customers with the mid-market rate, they do charge a larger fee to compensate; amounting to approximately 0.50% of the transfer value. Unfortunately, these alternatives can’t always send funds to all corners of the globe and by a variety of methods, which is one of MoneyGram’s primary strengths.

As an example, let’s compare MoneyGram against its competitors when exchanging Euro (EUR) into Australian Dollars (AUD):

As you can see, there are certainly some benefits to using MoneyGram. With its ability to provide payments to hundreds of countries and by a variety of methods, it does have its uses. But it is very unlikely to offer competitive exchange rates when compared to other similar remittance services out there, such as WorldRemit (review) and TransferGo (review).

4. Transfer speed

The speed of MoneyGram’s services vary greatly depending on the method of delivery selected. Transfers initiated via cash pickup and mobile money are completed almost instantly. While bank transfers usually take between 1 – 3 business days to be fulfilled.

5. Key features

What are the key features of MoneyGram’s online platform? Let’s take a look at the various payment services offered by the company.

Spot contract. A spot contract consists of a single payment from one currency to another at the currently available exchange rate. If you need to send money right away, simply log in to the MoneyGram website, and with a couple of clicks, a transfer can be arranged. Unfortunately, at this stage, this is the only type of payment that MoneyGram can facilitate. As a result, anything resembling the more advanced features offered by other currency transfer services, such as scheduled payments or conditional orders, are not possible.

Flexible delivery. MoneyGram’s strengths lay in its ability to transfer funds in a variety of customer-friendly ways. In this spirit, the company has established relationships with over 350,000 cash pickup locations in 200 countries. This large network of retail agents allow in-person transactions and provide flexibility into areas of the world with limited banking infrastructure.

6. Customer service

In addition to MoneyGram’s headquarters in the United States, the company has many international offices; so many in fact, that there are almost too many to list. These administrative hubs are supported by the company’s network of retail agents, which consist predominately of convenience stores and corner shops. As outlined earlier, there are over 350,000 of these located around the world. Their locations can be found on MoneyGram’s website. For transactions occurring online, the company’s customer service team can be contacted by phone or email.

+61 2 8037 5390 (AU)
+44 800 026 0535 (UK)
+1 800 666 3947 (US)

In my experience, I found the MoneyGram customer service staff to be friendly and helpful. I did not have to wait too long to speak with someone on the phone, and my queries by email have been answered in a prompt and professional manner.

7. Security and regulation

Is MoneyGram safe? Let’s take a look at the various initiatives adopted by the company to ensure the security of its customers.

Government regulation. As MoneyGram is headquartered in United States, the company is regulated by FinCEN. MoneyGram’s international subsidiaries are also regulated by the relevant authorities in the jurisdiction of their operations, such as the FCA in the United Kingdom.

Customer funds held in trust. In accordance with the standards imposed by government regulators, the funds of MoneyGram’s customers are held in segregated accounts and are therefore kept completely separate from the company’s own operating accounts. This ensures the security of customer funds, should MoneyGram encounter financial difficulties.

Website security. The MoneyGram website is protected with TLS encryption, which prevents sensitive data from being intercepted during your visit. You can confirm that this is in place by recognising a green padlock next to the website’s URL on your browser.

8. Reputation

Can you trust MoneyGram? Let’s take a look at look at some of the key factors which affect the company’s reputation.

Trustpilot. As of publication, MoneyGram has received 259 reviews on Trustpilot with an average rating of 1 out of 5 stars; representing a positive experience in only 4 percent of interactions with its customers. I can’t ever remember seeing such a poor score.

Here are some of my observations on the feedback posted:

Social media. Upon viewing the Facebook and Twitter feeds of MoneyGram, we can see a range of varied interactions between the company and its customers. As MoneyGram is very much a consumer level operation, they respond to many queries each day. Their responses appear to be prompt and helpful, but rather bland. To be fair, it really looks like their social media team does receive all sorts of strange messages, so they do reasonably well to keep on top of everything.

Hello Linda. Sorry to hear about the trouble you experienced. The system is now available. If you need to go to a MoneyGram location we suggest to call the agent prior to visiting their location to confirm their services are operational. You can fin… https://t.co/x9o8nccHf4

— MoneyGram (@MoneyGram) July 15, 2018

In addition to answering customer queries, MoneyGram is quite active in posting general cultural news, which is aimed at engaging their followers.

Mainstream media. As for the mainstream media, MoneyGram is often in the news. As a large publicly listed company, it receives quite a bit of attention due to solely to this fact. From time to time there is speculation on its merger and acquisition with other companies; such as the rumored merger with Western Union in 2012 and the attempted purchase by Ant Financial in 2018. It also received quite a bit of bad press due to customers complaining about what are perceived to be excessive fees.

MoneyGram and Ripple are teaming up. Business Insider

MoneyGram fined $100 million for wire fraud. Krebs on Security

“Rip-off” money transfer companies under fire in the U.K. The Guardian

9. User experience

The MoneyGram website has been designed thoughtfully, with special attention being paid to user experience and simplicity. In addition to its online platform, MoneyGram has also developed mobile apps for both Apple and Android devices.

Registration. The sign-up process is relatively straight-forward. You begin by entering your email and a password, before providing essential contact information such as name, address and phone number. The entire process takes around 5 minutes.

Before you are able to commence transferring funds, you first need to provide proof of identification so MoneyGram can verify your account. Two documents are required; one proving your identity, such as a passport or drivers licence, and one proving your address, such as a bank or utility statement.

How does MoneyGram work?

To familiarise you with the MoneyGram service, I’ll take you through a transaction I completed with them recently. If you need some guidance in navigating your own account, you can follow along below.

Step 1. Visit moneygram.com and log in. Once you have entered the MoneyGram website, you are greeted with a minimal interface. To begin a transaction, click Send to Someone New

Step 2. Enter the name of your intended recipient and the country of their location. Then you can select the method in which the funds will be delivered. These will vary depending on your recipient’s location. In my example, only cash pickup is available.

Step 3. Enter the value of your transfer, in either the sending or receiving currency denomination. Then select the method of payment. In my example, only debit or credit card is available. Next to the listed payment method, the applicable transfer fee is displayed. This will increase as the value of the transfer increases.

Step 4. As I have selected debit/credit card, now is the time to enter the specific payment details, including the billing address attached to the card.

MoneyGram squeezes in a short warning in attempt to protect you from fraud. Click Almost Done.

A summary of the quoted transaction is provided for your review. Once you are sure you want to confirm and proceed with the transaction, click Send Now.

Once your transaction is confirmed, it is time for MoneyGram to get to work and begin processing your payment.

Step 5. Once your funds have been received by MooneyGram, they will finalise the transfer to your recipient. You can track your transfer online or with their mobile app. Additionally, throughout the process, you will be provided with email updates as the payment moves within the system.

All done. Finally, once the transfer has been completed, its status will be updated accordingly and the payment will be reflected in your recipient’s account shortly.

In my experience, the MoneyGram online platform was simple to use and I was satisfied with the updates provided to me along the way. The entire process took only a few minutes, and I was able to pick up my cash from a local convenience store later the same day.

10. Conclusion and final thoughts

If you have simple requirements, MoneyGram can be a very useful service. The almost instantaneous delivery of funds all over the world certainly has its benefits. However, with this flexibility, the service also attracts large transfer fees and poor exchange rates. Although I found the service pleasant overall, it seems as if the pricing is aimed at gouging those who don’t know any better.

As an online platform, MoneyGram is really quite limited. Low transfer limits and no advanced functionality whatsover, make this a suitable for only the bare basics. Those wanting a modern service may liek to take a look at WorldRemit or TransferGo, who both offer similar service with much better rates. If you wish to take the next step, TranferWise probably offers the best rates in the market, but not all locations are available. If you’re stuck for time MoneyGram will get the job done. If you can look around a little more, you might be able to find something much cheaper.

Our rating: 2 stars