Tuesday , August 11, 2020

Brink’s Makes a Significant Investment in MoneyGram

MoneyGram International Inc. is proving adept at attracting diverse investors. Cash-management provider The Brink’s Co. announced Thursday that it has invested $9 million in MoneyGram stock for a 4.95% stake in the company.

The Brink’s investment comes in the wake of the $50 million Ripple Labs Inc., developer of the XRP cryptocurrency, invested in MoneyGram last year. Much of that investment is going to support blockchain-based cross-border payments.

Richmond Va.-based Brink’s, best known for its armored trucks for transporting cash, disclosed the MoneyGram investment in its fourth-quarter earnings report. Brink’s said it is working with MoneyGram, but was vague about what’s in store.

“Brink’s and MoneyGram are in discussions to develop a long-term strategic partnership agreement that has the potential to yield significant commercial benefits for both companies,” the company said.

Brink’s president chief executive Douglas A. Pertz gave a bit more detail during a Thursday conference call with analysts. “Our goal is to help MoneyGram and its agent partners realize substantial operating efficiencies by improving their cash-management processes,” he said, according to a SeekingAlpha.com call transcript.

Pertz added that “we think there is a longer-term joint development of strategies around cash, payments in cash to digital, and digital to cash payments in the long-term that we can work on together,” according to the transcript. “We’re both very global businesses, the fit is very nice and we think there is great strategies that can be developed together.”

Dallas-based MoneyGram, which has 350,000 agents in about 200 countries, has not commented about the investment. A spokesperson did not respond to a Digital Transactions News inquiry. 

“I would say Brink’s is trying to develop additional products that extend its cash-management position into international cash management,” Tim Sloane, vice president of payments innovation at Marlborough, Mass.-based consulting firm Mercator Advisory Group Inc., tells Digital Transactions News by email.

Brink’s said it bought MoneyGram stock through open-market purchases, and recorded a $3 million non-cash charge related to a decrease in the fair market value of its initial investment. Brink’s, which also did not respond to a Digital Transactions News request for comment, said it has no intention of taking a controlling interest in MoneyGram.

MoneyGram’s online services are growing rapidly, but like its larger rival The Western Union Co., the company has struggled to keep its agent-based network growing and price-competitive in the age of digital payments and new competition. MoneyGram’s share price has fallen about 80% in the past three years. China-based Ant Financial Services Group abandoned its planned acquisition of MoneyGram in early 2018 in the face of U.S. government resistance.

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