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To fortify its presence in Eastern Europe, MoneyGram International Inc. (MGI) has penetrated the Bosnian market by inking an agreement with Nova Bank. As per the deal, customers of the bank will be able to use MoneyGram’s international network to transfer money to and from the bank’s 40 branches in Bosnia.

The agreement is expected to significantly expand MoneyGram’s customer base and boost its money transfer transaction volume as Bosnia is the second-largest market for money transfer in Eastern Europe. The country has over one million citizens living abroad and holds the 12^th rank in terms of the proportion of population living abroad, according to the World Bank.

Bosnia receives a large amount of money transfers from Austria, Germany, Switzerland and the U.S., which can be tapped by MoneyGram. The citizens are witnessing a surge in their money transfer options following legislative changes in the country.

The addition of Nova Bank will also strengthen MoneyGram’s agent network. The bank is one of the leading financial organizations in Bosnia and has been operating in the country since 1999.

MoneyGram continues to bolster its position as one of the leading money transfer companies in the world by constantly expanding its payment network via alliances. Recently, the company added Banco Ganadero, Bolivia’s largest bank, to its network. The agreement added 600 new locations to MoneyGram’s network. Moreover, the renewed contract with the leading Vietnamese bank, Vietcombank, will enable the people of Vietnam to send and receive funds, contrary to the earlier contract which only permitted receiving money.

Similarly, one of MoneyGram’s major competitor, Western Union Co. (WU), is aggressively expanding its global footprint. Recently, it announced an agreement with Veridian Credit Union to serve its members with global money transfer facilities. It also signed an agreement with Michigan-based Citizens Bank to provide its global remittance services to Citizens Bank customers via 219 of its branches across Ohio, Michigan and Wisconsin.

MoneyGram currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term ‘Neutral’ recommendation on its shares.

 
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