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MoneyGram CEO talks cash, transfer fees, and crypto - YouTube
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the CEO of moneygram and he
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explained why remittances
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matter.
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>> If you're from many of the
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countries, Mexico, Philippines,
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India, Bangladesh, Pakistan,
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some of the largest received
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markets in the world it's
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absolutely critical to the lives
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of the consumers in those
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countries.
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But many people don't appreciate
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that.
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If it's not the life that you
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live, it's not something that
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you ever really get involved in.
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>> Companies like yours have
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been highly criticized in
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previous years, as to costs of
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transactions and the idea that
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only when they'll absolutely
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drag kicking and screaming will
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you cut the cost of transfer.
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>> It is actually very
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complicated to move money around
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the world, few companies can do
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it at scale, few companies can
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do it in the number of countries
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we do it in.
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So these companies, come
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together like money grams and
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your competitors do really
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provide a unique service and
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that is to instantly get money,
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move funded from United States
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to Mexico in literally
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subseconds, for the ability to
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take $350 you worked hard to
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earn and get it back to your
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mother so she can pick it up in
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Mexico, use it for food and
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healthcare, you know, housing,
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realtime, is actually, I think,
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a very unique service.
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And we've worked really hard.
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I mean we've listened to the
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world bank.
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We understand what they're
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trying to do on costs and we're
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really proud today to say we've
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met their 3% initiative which is
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on average, our send through
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moneygram is less than 3% of the
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face value of the transaction,
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of the principle sent rather for
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the transaction.
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>> So let's break this down, the
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digital wallet.
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It's supposed to be the way
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forward that will help reduce
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costs.
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How does that affect you?
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>> Well actually, can be very
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addtive to what we do and that's
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one of the things really
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noticeable throughout the
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pandemic, right, which is
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consumers are looking for new
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and safe, easier ways to send
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and receive funds,
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traditionally, moneygram would
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have been all cash to cash,
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about 2011, 2% of the entire
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business we operate will be, we
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would call digital.
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Today it's about 35%.
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>> So if you'll forgive my
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bluntness.
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>> Please --
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>> If I am sending money from my
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account, through you, to another
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account, so it is an entirely
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digital transaction from start
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to finish, why should it cost
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3%?
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>> Actually it costs less in
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that scenario which is pretty
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interesting.
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And something that people don't
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prooeks, well, because we don't
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have the cash handling side of
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it.
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Cash can be very expensive to
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handle, to convert, cash
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pick-up, cash transformation,
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agents have to have cash on file
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and in stores at the operations
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they locate can be expensive,
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have to deal with foreign
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exchange, the largest single
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expense is compliance, global
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banking can be expensive and if
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you look at our costs online or
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the walk in space, care that to
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what it would cost you to do is
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traditional wire transfer
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through a bank, it's materially
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cheaper.
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>> The new digital entrant,
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believe they can eat your lunch.
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>> Well the secret is a lot of
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digital players are looking to
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increase their cash flow around
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the world, because of how many
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still rely on cash pay-out.
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Mexico today, 90% of all
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transfers are picked up in cash
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yet we have real bank account
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connections to any bank in
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Mexico, yet the Mexican
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constituents still want to pick
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up in cash.
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Contrast with India, about 50%
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of transfers to India are picked
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up bank account so digital
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entrants looked to disrupt that
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early on, now say I need to add
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cash pay-out rails, even our
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friends at Facebook looking at
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how do they actually get cash
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paid out?
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>> What about crypto itself,
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where does crypto fit into this?
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>> I actually think money gram
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can play a huge role in what I
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call interoperatability, when
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you're in that crypto world its
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a super efficient flow of funds
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for payment purposes but when
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you try to take that back into
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the fiat world it gets quite
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expensenive, can be 1 to 2% for
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fiat into crypto, another to
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exchange it back out again and
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that doesn't take into account
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the volatility and movement of
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the crypto value, very much like
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a foreign exchange rate in some
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respects.
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>> If my coffee shops agrees to
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accept Libra and somebody owes
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me Libra in another country and
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transfer to me, my coffee shop
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takes it, then I have defeated
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the currency world.
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>> Conceptually you have, yet I
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haven't met a cryptocurrency yet
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that isn't priced against the
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dollar.
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And I think that's important to
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understand, because most
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consumers today are not paid in
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cryptocurrencies.
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Right?
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So their base currency is still
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the fiat of their home country,
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so that coffee, I guarantee if
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they accept that cryptocurrency,
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they will accept it but it will
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be similar than in U.S. Dollars
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if not more expensive in most
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cases.
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>> Final question what we often
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ask people on "Quest means
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business."
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I'm going to give you either a
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dollar, a euro, a piece of
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Bitcoin, or gold?
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