What Is MoneyGram? How Does This Major Competitor to Western Union Stack Up?

MoneyGram's services can help you transfer and receive money.

When you think of money transfer services, MoneyGram might not be the first name that comes to mind. But that’s not because it doesn’t have tremendous standing in the industry. In fact, MoneyGram is the second-largest money transfer provider in the world.

MoneyGram International got its start as Travelers Express Co., Inc. back in 1940 in Minneapolis. The company quickly transformed into one of the world’s largest money order and electronic payment processors. In 1998, Travelers Express parent Viad Corp. bought international money transfer company MoneyGram Payment Systems, Inc. — a subsidiary of a parent company that also owned Western Union.

Travelers Express and MoneyGram Payment Systems Inc. banded together and formed MoneyGram. Over the next few years, it became a brand that was trusted and recognized worldwide. In 2004, Viad sold MoneyGram — which resulted in it becoming the standalone, publicly-traded company it is today.

MoneyGram offers online and in-person domestic and international money transfers, as well as mobile phone top-ups, bill payments, money orders and prepaid-card loading — making it a major player in the world of online money transfers.

Here’s a quick overview of topics that will answer how MoneyGram works and other questions you might have:

Related: How To Get Money Orders and Other Urgent Items When Your Bank Is Closed 

Pros and Cons of MoneyGram

It helps to examine the pros and cons of a service before diving in, just so you know what to expect. Here are some of the advantages and drawbacks of using MoneyGram:

Pros and Cons of MoneyGram Service
Pros

 

 

 

 

  • Money can be sent to more than 200 countries and territories, often within minutes
  • Option to send funds directly to a bank account or mobile wallet
  • Money transfers designated for pickup are usually ready within minutes
  • Optional MoneyGram Plus Rewards Program
Cons

 

 

 

 

  • $10,000 maximum for online transfers, every 30 days
  • Most in-person transfers require cash
  • Fees vary depending on location, amount, payment method and other factors
  • Payout in specific currencies only available at select locations

[Back to top]

MoneyGram Services Overview

To give you an idea of whether MoneyGram might be the right choice for you, here is some information on its fees, benefits and drawbacks.

Learn More: Your Complete Guide To Sending Money Online

Fees

MoneyGram fees depend on various factors, including the destination of the money, how much you’re sending and method of payment. Choosing to pay with a U.S. checking account can result in lower fees, but if you pay with a credit or debit card, you can expect the fees to be slightly higher.

What Is MoneyGram Best For?

MoneyGram has a vast global network, with about 350,000 agency locations in more than 200 countries. Their service is best for people who want a wide variety of money transfer options, either online or in-person to domestic and international locations. It’s also beneficial for people who need to make an immediate transfer because many MoneyGram transfers complete within minutes.

In addition, MoneyGram offers a MoneyGram Plus Rewards Program, which offers these benefits:

  • Faster transactions
  • Notifications when money has been picked up
  • Personalized exclusive offers

What Is MoneyGram Worst For?

Anyone who wants to make an online transfer of more than $10,000 at a single time — or within one month — won’t be able to do so with MoneyGram. Also, you can only make transfers online or in-person, so making transfers by phone is not an option.

See: Walmart Check-Cashing Services You Should Use

[Back to top]

    Where Can You Access MoneyGram Services?

    You can access the MoneyGram service by making a transfer online or by visiting a MoneyGram branch. To find the nearest branch, use the MoneyGram locator tool.

    Required Information To Send Money

    Whether you’re sending money online or completing an in-person transaction, you’ll need this information at the ready: 

    • Government-issued ID, such as a driver’s license
    • Recipient’s full name, which matches the name on the person’s identification
    • Recipient’s location
    • Transfers to bank accounts require recipient’s bank name and account number
    • Transfers to mobile wallets require recipient’s mobile number and, if applicable, international dial code

    Required Information To Receive Money

    When you’re receiving money in person, you’ll need the following information:

    • A valid form of ID, such as a driver’s license or passport
    • The reference number associated with your transfer, which you can get from the sender
    • Completed receiver form, which is available at the pickup location

    Learn: 5 Best Places To Get a Money Order

    [Back to top]

    Can You Trust MoneyGram Services?

    You can probably trust MoneyGram more now than you could a couple of years ago, thanks to a $125 million penalty that the company was assessed by federal authorities in 2018. According to The Washington Post, the Federal Trade Commission and Department of Justice alleged that MoneyGram didn’t do enough to prevent fraudulent transactions within its service. The FTC found that at some MoneyGram locations, roughly half of the transactions were fraudulent.

    As part of a deferred prosecution agreement with the Department of Justice, MoneyGram has agreed to do the following:

    • Within two days of receiving a complaint about an identified fraudster, the fraudster will be blocked from using MoneyGram’s transfer services
    • Government-issued identification will be required by anyone sending or receiving money transfers
    • Money transfers originating from the U.S. will be monitored
    • Agents connected to a high rate of fraudulent transactions will be disciplined, restricted or terminated

    MoneyGram’s advice to avoid money transfer fraud is to never send money to someone you don’t know — for any reason. Also, be wary of wiring money to someone claiming to be a relative in crisis. If you can’t verify the person’s identity, don’t send the money. Once you send a wire transfer, the funds are gone and you will not get them back.

    Find Out: Difference Between a Money Order and a Certified Check

    [Back to top]

    MoneyGram vs. Competitors

    When it comes to transferring money, MoneyGram might not be your cheapest option. But determining exact fees is impossible without knowing the details of your specific transaction, such as where and how you’re sending the money and in what amount.

    Fortunately, MoneyGram offers a way for you to estimate fees on money transfers, so you’ll have an idea of what each transfer will cost you. Here’s a look at some of the options to send money domestically and internationally via a transfer service:

    MoneyGram Transfers vs. Competitor Transfers
    Money Transfer ServiceTypes of Transfers OfferedTransfer MaximumsTransfer SpeedTransfer Fees
    MoneyGramDomestic and international transfers online and in-stores$10,000Many within minutes$7.99 and up
    Western UnionDomestic and international transfers online, by phone and in-stores$500-$10,000 or more, depending on serviceIn minutes to up to five business days, depending on service99 cents and up
    TransferWiseInternational transfers onlineVaries by origin and destination; $1 million if sending from the U.S.In minutes to up to two business daysVaries by country; no domestic transfers offered
    XEInternational transfers online or by phone$500,000Majority of transactions completed same-dayNone; no domestic transfers offered
    XoomInternational transfers onlineUp to $120,000, depending on sender’s levelMinutes to a few daysVaries by country; no domestic transfers offered

    [Back to top]

    When Should You Opt For MoneyGram Over Other Transfer Services?

    Although a variety of money transfer services offer international transfers, very few offer domestic transfers. However, MoneyGram is one of the few that offers these transfers. If you don’t need to complete transfers by phone and you plan to complete money transfers on a regular basis, you might want to opt for MoneyGram over other services.

    By using this service, you can also join the MoneyGram Plus Rewards Program, which can help you save money. For example, once you join, you’ll receive a fee discount of 20% on your second transfer and 40% off every fifth transfer thereafter, with the ability to get even more benefits if you upgrade to Premier status after your fifth transfer. So even though MoneyGram’s fees might not be the cheapest initially, joining this program can help defray some of the expenses — especially if you’re a frequent user.

    [Back to top]

    More From GOBankingRates

    About the Author

    Cynthia Measom is a Texas-based writer specializing in finance, business, parenting and education. With almost a decade of online writing experience, her work has appeared on websites such as Chron.com, The Bump and The Motley Fool. Measom received a Bachelor of Arts in English from the University of Texas at Austin.