Moneygram International (NYSE:MGI) lets customers send money through a worldwide network of over 190,000 agent locations in approximately 190 countries and territories. MGI has traditionally relied on fixed fees on its services for profit, but also invests the float, or temporary cash it holds for clients who are sending money.
Money transfers, which are the lifeblood of Moneygram's business model, are heavily dependent on immigration patterns. The bulk of the volume of money transfers each year come from immigrants sending cash home to their families.
In 2009, MGI earned a total of $1.17 billion in total revenues. This compares to its previous year's total revenues of $1.27 billion. However, despite the decrease in total revenues, MGI was able to actually improve upon its net income situation. Between 2008 and 2009, MGI's net income increased from a net loss of $261 million in 2008 to a net loss of just $2 million in 2009.
MGI divides its business into two main functions:
MGI caters primarily to "unbanked" or "underbanked" consumers who need to transfer sums of money quickly and painlessly, but do not have access to, or choose not to use, traditional banking institutions. The company achieves this through a worldwide network of agents, totaling 190,000 locations in approximately 190 countries (prominently the United States, Spain, Italy, and the United Kingdom). Among the services in this segment, consumers may transfer direct sums of money internationally, purchase money orders and pay bills electronically or by phone.
MGI provides check processing, money orders, and official check outsourcing services. Through its subsidiary, Financial Services Management Corp. (FSMC), the company offers high volume check processing and disbursement, often related to rebates and government programs. MGI, as the leading national issuer of money orders, sells money orders through financial institutions to individual consumers. Lastly, the company's official check outsourcing services facilitate the issuance of official checks by financial institutions. As a medium of transaction more reliable and trustworthy than personal checks, official checks are used when the payee requires further assurance. MGI provides services that allow financial institutions to securely print official checks at multiple locations, thus lessening the need for other forms of transactions, such as wire transfers.
Maintaining MGI's agency Network is essential to MGI, which relies on an international network of retail agents for its Global Funds Transfer segment. Furthermore, a substantial portion of its transaction volume is generated by a limited number of agents. Any decision by an agent to discontinue business with MGI, or reduce its own size, will adversely affect MGI's profits because MGI relies on these agents to provide customers with access to its services.
Meeting regulations is difficult given MGI's involvement in a wide range of countries. The company is often subject to complicated and occasionally contradictory regulations.  For example, it must abide by the requirements of the Office of Foreign Assets Control, which prohibits MGI from operating in certain countries. Furthermore, domestic and international laws related to anti-money laundering and anti-terrorism often affect MGI's operations. The company often cannot directly enforce these regulations upon its agents because agents are essentially independent businesses, and MGI does not have the resources to individually ensure each agent's compliance. However, MGI must suffer the consequences of any failures to follow regulations, including loss of licenses, terminations of contracts, and official fines.
Because its operations are inevitably tied to those of its agents, MGI's performance relies upon the performance of its agents. At any one time, MGI has on average $1.2 billion in credit exposure to its agents in the form of money orders, money transfers, and bill payment. As such, it faces significant risk from agent default and fraud, and may suffer second-handedly from any failures of its agents to attract customers. Furthermore, operating through agents limits MGI's control over its own reputation, which will change according to that of its agents. 
The money transfer business relies in part on immigration patterns, when individuals move toward economic prosperity in order to send money back to their native countries. Any disruptions, such as wars, acts of terrorism, and health emergencies, may adversely the flow of immigration, and adversely affect MGI's operations.
MGI competes with most institutions providing money orders and money transfer services. Its primary niche - Global Funds Transfers - is concentrated with a small number of large competitors and many small ones. Most prominently, Western Union Company (WU) has an agent base that is three times that of MGI, and controls a 17% market share.