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MoneyGram is one of the most recognisable money transfer services in the world. Its extensive network makes it easy to send money to friends and family in more than 200 countries. But how safe is MoneyGram? We examine what safeguards it has in place, what scandals it has been involved in and how it’s coping with new competitors entering the market.
How safe is my money with MoneyGram?
MoneyGram prioritises protecting your banking information when you make a transfer. It has established a reputation for secure transfers with a number of safeguards:
- Established and licensed. Founded in 1940, MoneyGram is a licensed money transmitter that has successfully sent millions in transfers.
- Tracking. You can easily track your transfer online by entering your last name and the reference number in your confirmation.
- Identification. ID checks to ensure the account is yours and has not been taken over by a fraudster.
- Secure connection. Using physical, technical and administrative security measures, its website is verified by Entrust, Inc.
- Accountability. MoneyGram (MGI) is listed on the NASDAQ.
Compare MoneyGram to other money transfer services
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How secure is MoneyGram as a provider?
Generally, money transfer firms tend not to go under. The market as a whole is largely stable with legacy providers like MoneyGram and Western Union playing a big part in its steadfastness.
As one of the oldest and largest providers in the market, MoneyGram’s position is pretty secure. It serves 150 million customers across the globe and has steadily been increasing its number of locations in the past decade to more than 400,000.
How is MoneyGram regulated?
In the UK, MoneyGram is regulated by the Financial Conduct Authority (FCA) for the provision of money remittance services. It is also licensed and regulated by HMRC as a money services business.
What this means is that it needs to meet certain compliance requirements, including the following:
- Regulations. Any money transfer company that has a turnover of more than EUR3 million per money must be authorised under the Payments Services Regulations 2017 and the electronic money regulations 2011.
- Pricing. It needs to meet rules on fair pricing.
- Transfer time. MoneyGram must meet time requirements on executive transfer orders.
- Anti-money laundering. It has to follow protocol over the supervision of financial crimes and anti-money laundering.
- Safeguarding. Money transfer providers are required to keep client money in a client account, separate from their company account.
What scandals has MoneyGram been involved in?
While MoneyGram has a long-established history, it’s not blemish free. In fact, the money provider has had some significant fraud scandals in the past.
- 2009. MoneyGram had to pay US$18 million to settle Federal Trade Commission (FTC) charges that it allowed its money transfer system to be used by fraudulent telemarketers.
- 2012. MoneyGram was convicted by the Department of Justice in a money-laundering scandal. It admitted to “aiding and abetting wire fraud and failing to maintain an effective anti-money laundering program”.
But it’s not all bad news. As a result of these incidents, MoneyGram has been under regulatory scrutiny for many years and has had to complete a mandatory compliance improvement programme.
Since then, it has invested in improving the verification of transactions, updating its ID verification software and focusing on hiring additional anti-money laundering personnel and better staff training.
Read our in-depth guide to the most common money transfer scams to watch out for
Is Moneygram improving its services?
Even just a few years ago, the majority of MoneyGram’s transfers were cash to cash. In fact, in 2019, these made up 80% of all its transactions. As new money transfer apps such as Wise (TransferWise) and Remitly started to enter the market, it looked like MoneyGram could be left behind as the industry moved towards a more digital approach.
However, as a result of the Covid-19 pandemic, MoneyGram accelerated its digital transformation. It invested heavily in its mobile app and integrated with mobile wallets in order to create a hybrid combination of online and brick-and-mortar services. Its MoneyGram mobile app now supports fund transfers on a real-time basis.
Why did MoneyGram collaborate with Ripple?
MoneyGram realised that it needed to improve its digital services and innovate as a business. One of these innovations was a short-lived partnership with the blockchain platform, Ripple.
The partnership involved MoneyGram using Ripple’s XRP digital currency for cross-border payments and foreign exchange settlements. But when Ripple had some issues with the Securities Exchange Commission (SEC), MoneyGram suspended trading on Ripple’s platform.
However, it may not be the last we see of this collaboration. According to statements at the end of the partnership, both firms are “committed to revisiting our relationship in the future”.
What are Moneygram’s ESG scores?
Increasingly, a company’s Environmental, Social and Governance (ESG) actions are becoming a key factor for customers and investors alike.
MoneyGram is neither good nor bad when it comes to ESG. There are some initiatives, such as its direct transfer software product, that have a positive impact on societal infrastructure. But some elements, such as emissions and waste, are having a negative impact.
See where there’s a MoneyGram near you
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Ask an Expert
I’m wanting to buy a motorcycle part from America. It’s from an independent person online. Is this safe using this service for payment. It’s being delivered to the uk? The seller says it’s safe but I have my doubts.
Hi Stevo,
Thank you for contacting finder. We are a comparison website and general information service, we’re more than happy to offer general advice.
MoneyGram prioritises protecting your banking information when you make a transfer. It has established a reputation for secure transfers with a number of safeguards:
– Established and licensed. Founded in 1940, MoneyGram is a licensed money transmitter that’s successfully completed millions of transfers.
– Tracking. You can easily track your transfer online by entering your last name and the reference number in your confirmation.
– Secure connection. Using physical, technical and administrative security measures, its website is verified by Entrust, Inc.
Accountability. MoneyGram (MGI) is listed on NASDAQ.
You may contact Moneygram directly if you need additional information.
I hope this helps.
Cheers,
Danielle