Struggling MoneyGram’s (NYSE: MGI) stock price has received a much needed support from the robust growth in digital channels last month, helping offset the negative impact of coronavirus related-lockdowns at its outlets.
The Dallas-based firm, which handles remittances and cross-border payments. said that its digital transactions surged 81% year over year in April, accounting for more than a quarter of all transactions. The company says that momentum is extended into May.
“Over the last few years, we’ve invested heavily in our digital transformation by building the best digital customer experience in the industry and then rapidly launching those capabilities to new markets,” Alex Holmes MoneyGram chairman and chief executive officer said in a press release on Tuesday.
Its digital channels — that include MoneyGram online, account deposit & mobile wallet services — helped in generate 57% growth in digital transactions since the first three months of the year .
“We’ve built a valuable digital business that has quickly grown from a fintech start-up to a sizable and profitable piece of the overall business,” said Kamila Chytil, chief operating officer, and leader of the company’s digital business.
Shares lifted almost 10% to close at $1.68 on Tuesday, but fell 6% to $1.58 on Wednesday morning. The stock has fallen by a quarter this year.
This contrasts with overall trading it the first quarter of the year, which earlier this month posted revenue of $290.9m year over year, a decline of 8% or 7% on a constant currency basis. It also reported a net loss of $21.5m, and an adjusted diluted loss per share of 5 cents over the same period.
MoneyGram stock, which was over recent quarters was on the brink of standing among penny stocks. The stock trading of remittance company remained under pressure over the past two quarters amid rising competition from rivals such as market leader Western Union and UK fintech TransferWise, which offer greater scale and lower fees.