On Tuesday, MoneyGram International Inc. (NASDAQ:MGI) received a reversal of $16.5 million as the verdict that was passed against it in a patent-infringement lawsuit filed by Western Union Inc (NYSE:WU) in 2009 was proved invalid. The US Court of Appeals for the Federal Circuit in Washington ruled out the verdict that was passed by the lower court of Texas in 2009.
Previously, Western Union had charged MoneyGram of contravening certain patents related to money transfer through telephones and other sources that do not require written forms. In 2009, a federal jury in Texas had also penalized MoneyGram with a $16.5 million payment to Western Union.
However, MoneyGram appealed to the US Federal Court and Tuesday's ruling has made the 2009 verdict invalid, thereby saving the already loss-making money transfer company.
Adds 8000 Locations in Russia
Concurrently, on Tuesday MoneyGram announced its alliance with the State Savings Bank of Russian Federation, adding 8000 branches of the bank to MoneyGram’s network throughout Russia in one day.
This is a milestone achievement for MoneyGram, and with over 12 million of immigrant workers in Russia, the association will also provide the company with ample growth opportunities. Russia is the third-largest market for personal remittances in the world after the US and Saudi Arabia.
Money transfer business remains the driving force for MoneyGram. The company has been expanding its money transfer business across the globe through various recognized financial institutions.
While Russia is ranked among the world's top 20 receiving countries for money transfers, management projects a strong remittance market in the country. In 2009, Russia received an estimated $18.6 billion in remittance according to the World Bank, primarily to the US, Uzbekistan, Tajikistan and Ukraine. Hence, the company is in the process of evolving advanced ways of consolidating in the region.
Alliance with 7-Eleven in Australia
Additionally, MoneyGram also publicized its partnership with 7-Eleven departmental stores group in Australia to launch a new self-service money transfer stalls, initially through more than 400 stores across Australia. The company expects to grow this service by three-fold by early 2011.
MoneyGram will now be available day and night with the help of stalls installed in the 7-Eleven stores. Moreover, with over 5 million immigrants in Australia comprising 25% of the total population, the region remains quite resourceful for the development of MoneyGram’s money transfer service.
In 2009, Australia received an estimated $3.0 billion in remittance according to the World Bank, primarily to India, China, Philippines, Vietnam, Lebanon, Bangladesh, Sri Lanka, Pakistan and Thailand.
Further, through such alliances, MoneyGram has grown its network to more than 207,000 agent locations in 191 countries and territories. Besides, the company is now exploring more money transfer channels that include retail, petroleum and convenience stores, in order to speed up its money transfer services and enhance its remittance volumes.
On Tuesday, the shares of MoneyGram closed at $2.61, up 6.1%, on the New York Stock Exchange.