By Maria Bruno-Britz, Bank Systems & Technology
Anyone who thought Coinstar was just a company that provided nifty change counters at the supermarket should think again. The company, which also offers such services at its kiosks as DVD rentals and gift cards, has made an acquisition that further strengthens its presence in the international remittance market.The Bellevue, Wash.-based company announced it will purchase GroupEx Financial Corporation (GFC; La Mirada, Calif.), an independent provider of electronic money transfer services between the U.S. and Latin America. GFC operates a network with approximately 1,650 send agents in 23 states servicing 13 countries. Once the deal meets regulatory approval, the Coinstar Money Transfer (CMT) service will be offered at more than 31,000 agent locations in 143 countries.
It seems like everyone, including banks, wants a piece of the remittance market these days, an area that has traditionally been dominated by the likes of Western Union and MoneyGram. The GFC purchase is not Coinstar's first foray into the remittance space-it acquired Travelex Money Transfer in 2006. According to Marci Maule, public relations director for Coinstar, "The acquisition of GroupEx ... is a complementary, tuck-in to our existing money transfer business, providing us with more than 1,600 agents in the U.S. and a strong U.S. to Latin America business corridor. Last year, we acquired Travelex Money Transfer, which has now become Coinstar Money Transfer."
The move not only signifies the growing importance of the foreign worker market for Coinstar, but it will also give Western Union and MoneyGram a run for their money. According to comments by Aite Group research director Gwenn Bézard, "With Travelex Money Transfer and now GroupEx's acquisition, Coinstar has been building volumes to become a credible alternative for supermarket chains-a space historically dominated by Western Union and MoneyGram. The combination of Coinstar's network of kiosks and POS devices in retail locations and the volumes of GroupEx make Coinstar a serious competitor for the two leading money transmitters."
The international remittance market is pegged at a value of over $369 billion and is estimated to grow to $465 billion by 2010, according to Aite Group. With figures like this, there's no doubt this area is poised for some significant growth in the coming years. Anyone who can capitalize on it in a novel way that appeals to this often bank-adverse consumer segment will reap the rewards.
Makes me wonder how Wal-Mart will respond to this too...Coinstar's purchase of international money transmitter indicates thee growing importance of the remittance market to financial services providers of all kinds.