Euronet Worldwide, Inc. (Euronet) operates as a financial technology solutions and payments provider.
Euronet offers payment and transaction processing, as well as distribution solutions to financial institutions, retailers, service providers, and individual consumers. The company’s primary product offerings include comprehensive ATM, POS, card outsourcing, card issuing, and merchant acquiring services, electronic distribution of prepaid mobile airtime, and other electronic payment products, as...
Euronet Worldwide, Inc. (Euronet) operates as a financial technology solutions and payments provider.
Euronet offers payment and transaction processing, as well as distribution solutions to financial institutions, retailers, service providers, and individual consumers. The company’s primary product offerings include comprehensive ATM, POS, card outsourcing, card issuing, and merchant acquiring services, electronic distribution of prepaid mobile airtime, and other electronic payment products, as well as international payment services.
Euronet is in electronic payment and transaction processing solutions for financial institutions, retailers, service providers, and individual consumers, utilizing the company's global payments network, platforms, and technologies. Through a collection of diverse technologies and services, the company's business segments and solutions meet a wide variety of payments requirements and process transactions throughout the world. It moves money in all the ways the world depends on. With a global footprint, the company provides compliant solutions that make financial transactions easier, faster, and secure.
Segments
The company operates through three segments: Electronic Funds Transfer (EFT), epay, and Money Transfer.
Electronic Funds Transfer (‘EFT’)
Electronic Funds Transfer (EFT) segment meets the needs of financial institutions and consumers through Euronet-owned and outsourced Automated Teller Machines (ATMs) and Point-of-Sale (POS) terminals, combined with value-added and transaction processing services. It deploys and operates its own ATMs, providing ATM services for financial institutions and offering electronic payment processing solutions. EFT provides a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems. In 2024, the EFT Processing Segment accounted for approximately 29% of the company’s consolidated revenues.
epay
epay segment provides retail payment solutions and delivers innovative connections between the digital content of the world’s leading brands and consumers. epay has one of the largest retail networks across Europe and Asia for the distribution of physical and digital third-party content, including branded payments, mobile, and alternative payments, partnering with over 1,000 of the world’s leading brands. In addition, through its own products, the company has leveraged its technology to solve business challenges, delivering scalable solutions to drive efficiency and effectiveness. The company's comprehensive range of consumer products simplifies transactions and provides financial convenience across a wide range of branded payments. epay operates in over 60 countries. It operates a network that includes approximately 777,000 POS terminals that enable electronic processing of prepaid mobile airtime top-up services and other digital media content. In 2024, the epay segment accounted for approximately 29% of Euronet's consolidated revenues.
Money Transfer
Money Transfer segment provides global money transfers and currency exchange information in retail stores, apps, and websites through Ria Money Transfer, Xe, and the Dandelion cross-border real-time payments network. Euronet’s Money Transfer segment offers real-time, cross-border payments to consumers and businesses across 198 countries and territories, enabling banks, fintechs, and big tech platforms to integrate an international payments solution into their own platforms. In 2024, the Money Transfer Segment accounted for approximately 42% of Euronet's consolidated revenues.
Ria Money Transfer, one of the largest consumer remittance companies in the world, offers real-time international money transfers with a special focus on emerging markets. In addition, Ria provides safe and affordable money transfers through a global network of cash locations and online, serving over 20 million customers annually.
Xe offers web and app-based currency information and industry-leading consumer and business cross-border money transfer services. Customers can send money, buy property overseas, and execute other international payments via the Xe website or app.
Dandelion is a leading real-time cross-border payment platform; it offers consumer and business transaction processing and fulfillment with alternative payout channels, such as bank accounts, cash pick-up, and mobile wallets. Dandelion powers cross-border payments for Xe and Ria, as well as third-party banks, fintechs, and big tech platforms.
EFT Processing
The company's EFT Processing segment provides comprehensive electronic payment solutions, consisting of ATM cash withdrawal and deposit services, ATM network participation, outsourced ATM and POS management solutions, credit, debit, and prepaid card outsourcing, card issuing, and merchant acquiring services. In addition to its core business, the company offers a variety of value-added services, including ATM and POS DCC, domestic and international surcharge, foreign currency dispensing, advertising, digital content sales at ATMs, Customer Relationship Management (‘CRM’), prepaid mobile top-up, bill payment, money transfer, fraud management, foreign remittance payout, cardless payout, banknote recycling solutions, and tax-refund services. The company provides these services either through its Euronet-owned ATMs and POS terminals, through contracts under which it operates ATMs and POS terminals on behalf of its customers, or, for certain services, as stand-alone products. Through this segment, the company also offers a suite of integrated electronic financial transaction software solutions for electronic payment and transaction delivery systems.
Sources of Revenues
The primary sources of revenues generated by the company's ATM network are recurring monthly management fees, transaction-based fees, surcharges, and margins earned on DCC transactions. The company receives fixed monthly fees under many of its outsourced management contracts. The EFT Processing segment also generates revenues from POS operations and merchant management, card network management for credit, debit, prepaid, and loyalty cards, prepaid mobile airtime recharge, and other electronic content on ATMs, as well as ATM advertising. The company primarily operates across Europe, Africa, the Middle East, Asia Pacific, Latin America, and the United States.
The company monitors the number of transactions made by cardholders on its network. These include cash withdrawals, balance inquiries, deposits, prepaid mobile airtime recharge purchases, DCC transactions, and certain denied (unauthorized) transactions.
The company's processing centers for the EFT Processing segment are located in Germany, Hungary, India, China, Indonesia, and Pakistan. These processing centers run two types of proprietary transaction switching software: the company's legacy ITM software, which it has used and sold to financial institutions since 1998 through its Software Solutions unit, and an innovative switching software package named Ren, which is hosted in Germany, India, and Indonesia, that was released in 2019. The company has been progressively transitioning all of its networks to Ren.
EFT Processing Products and Services
Outsourced Management Solutions
Euronet offers outsourced management solutions to financial institutions, merchants, mobile phone operators, and other organizations using its processing centers' electronic financial transaction processing software. The company's outsourced management solutions include management of existing ATM networks, development of new ATM networks, management of POS networks, management of automated deposit terminals, management of credit, debit, and prepaid card databases, and other financial processing services. These solutions include 24-hour monitoring of each ATM's status and cash condition, managing the cash levels in each ATM, coordinating cash delivery, and providing automatic dispatches for necessary service calls. The company also provides real-time transaction authorization, advanced monitoring, network gateway access, network switching, 24-hour customer service, maintenance, cash settlement and reconciliation, forecasting, and reporting.
The company's outsourced management solutions agreements generally provide for fixed monthly management fees and, in most cases, fees payable for each transaction. The transaction fees under these agreements are generally lower than those under card acceptance agreements.
Euronet-Branded ATM Transaction Processing
The company's Euronet-branded ATM networks, also known as IAD networks, are primarily managed by a processing center that uses its market-leading internally developed software solutions. The ATMs in the company's IAD networks are able to process transactions for holders of credit, debit, and prepaid products issued by or bearing the logos of financial institutions and international card organizations, such as American Express, Visa, Mastercard, JCB, Diners Club International, Discover, and UnionPay International, as well as international ATM networks like PLUS, CIRRUS, and PULSE, or domestic networks such as NYCE, Shazam, AFFN, STAR, and others across North America. This is accomplished through the company's agreements and relationships with these institutions, international credit, debit, and prepaid card issuers, international card associations, and domestic card associations.
When a bank cardholder conducts a transaction on a Euronet-owned ATM or automated deposit terminal, the company receives a fee from the cardholder's bank for that transaction. The bank pays this fee either directly or indirectly through a central switching and settlement network. When paid indirectly, this fee is referred to as the interchange fee. The company receives transaction processing fees for successful transactions and, in certain circumstances, for transactions that are not completed because they fail to receive authorization. The fees paid to the company by the card issuers are independent of any fees charged by the card issuers to cardholders in connection with the ATM transactions. In some cases, the company may also charge a direct access fee or surcharge to cardholders at the ATM. The direct access fee is added to the amount of the cash withdrawal and debited from the cardholder's account.
The company generally receives fees or earns margins from its customers for all types of ATM transactions:
Card Acceptance or Sponsorship Agreements
The company's agreements with financial institutions and international card organizations generally provide that all credit and debit cards issued by the financial institution or organization may be used at all ATMs that it operates in each market. In most markets, the company operates under sponsorship by its own e-money or payment service licensed entities. In some markets, it has agreements with a financial institution under which it is designated as a service provider (referred to as sponsorship agreements) for the acceptance of domestic cards and/or cards bearing international logos, such as Visa and Mastercard. These card acceptance or sponsorship agreements allow the company to receive transaction authorization directly from the card-issuing institution or international card organizations on a stand-in basis. The agreements generally provide for a term of three to seven years and renew automatically unless either party provides notice of non-renewal prior to the termination date. In some cases, the agreements are terminable by either party upon six months' notice. The company is generally able to connect a financial institution to its network within 30 to 90 days of signing a card acceptance agreement. The financial institution provides the cash needed to complete transactions on the ATM, but the company provides a significant portion of the cash to its IAD network to fund ATM transactions itself. Euronet is generally liable for the cash in the ATM networks.
Under the company's card acceptance agreements, the ATM transaction fees it charges vary depending on the type of transaction and the number of transactions attributable to a particular card issuer. The agreements generally provide for payment in local currency, though transaction fees are sometimes denominated in euros or U.S. dollars. Transaction fees are billed to financial institutions and card organizations, with payment terms typically no longer than one month.
Dynamic Currency Conversion
The company offers dynamic currency conversion (DCC) over its IAD networks, ATM networks that it operates on an outsourced basis for financial institutions, and over financial institutions' ATM networks or POS devices as a stand-alone service. DCC is a feature of the underlying ATM or POS transaction that is offered to customers completing transactions using a foreign debit or credit card issued in a country with a currency other than the currency where the ATM or POS is located. The customer is offered a choice between completing the transaction in the local currency or in the customer's home currency via a DCC transaction. If a cardholder chooses to perform a DCC transaction, the acquirer or processor performs the foreign exchange conversion at the time that the funds are delivered at an ATM or the transactions are completed through the POS terminal, which results in a pre-defined amount of the customer's home currency being charged to their card. Alternatively, the customer may have the transaction converted by the card-issuing bank, in which case the amount of local currency is communicated to the card-issuing bank, and the card-issuing bank makes the conversion to the customer's home currency.
When a customer chooses DCC at an ATM or POS device and Euronet acts as the acquirer or processor, the company receives all or a portion of the foreign exchange margin on the conversion of the transaction. On its IAD ATMs, Euronet receives the entire foreign exchange margin. If Euronet is not the acquirer or processor of the transaction, it shares the DCC revenue with the sponsor bank. On ATMs or POS devices that are operated for financial institutions, or where the company offers DCC as a stand-alone service to financial institutions or merchants, it shares the foreign exchange margin. The foreign exchange margin on a DCC transaction increases the amount Euronet earns from the underlying ATM or POS transaction and supports the deployment of additional ATMs in new locations.
Other Products and Services
The company's network of owned or operated ATMs allows for the sale of additional financial and other products or services at a low incremental cost. It has developed value-added services in addition to basic cash withdrawal and balance inquiry transactions. These value-added services include mobile top-up, fraud management, bill payment, domestic and international surcharge, CRM, foreign remittance payout, cardless payout, banknote recycling, electronic content, ticket and voucher, foreign currency withdrawal, advertising, and tax-refund services. The company is committed to the ongoing development of innovative new products and services to offer its EFT processing customers.
The company offers multinational merchants a Single European Payments Area (‘SEPA’)-compliant cross-border transaction processing solution. SEPA is an area in which all electronic payments can be made and received in euros, whether between or within national boundaries, under the same basic conditions, rights, and obligations, regardless of the location. This single, centralized acquiring platform enables merchants to benefit from cost savings and faster, more efficient payments transfer. Although many European countries are not members of the eurozone, the company's platform can serve merchants in these countries as well, through its multi-currency functionality.
Software Solutions
The company also offers a suite of integrated software solutions for electronic payments and transaction delivery systems. It generates revenues for its software products from licensing, professional services, and maintenance fees for software, as well as sales of related hardware, primarily to financial institutions around the world.
Ren Payments Platform
Ren was built from the ground up to operate in the evolving digital payments landscape of real-time settlements and emerging forms of payment, including QR codes, PINs, and biometrics. Ren primarily serves financial institutions, central banks, and fintech companies. It is offered as an on-premises technology where these businesses install the platform in their own data centers, or as a software as a service (SaaS) offering where development teams access it in Euronet’s global data centers using APIs. Versatile, Ren can be used as a payment hub or to deliver core banking functionality, such as issuing, merchant acquiring, transaction switching, and ATM management. For real-time payments, Ren is used by central banks to process transactions and by member banks that use Ren to connect their legacy systems to real-time payment networks in their countries.
EFT Processing Segment Strategy
The EFT Processing Segment maintains a strategy to expand the network of ATMs and POS terminals into new and existing markets that have the greatest potential for growth. The company continues to focus on diversifying its business by expanding its market presence and product portfolio, as well as outsourcing opportunities. In addition, it follows a supporting strategy to increase the penetration of value-added (or complementary) services across its existing customer base, including DCC, transaction-based fees, surcharges, cardless payment, banknote recycling solutions, tax refund services, advertising, fraud management, bill payment, mobile top-up, CRM, and foreign remittance payout.
The company continually strives to make its own ATM networks more efficient by removing unprofitable ATMs and redeploying them to new profitable locations. It makes selective additions to its own ATM network if it sees market demand and profit opportunities. In tourist locations, the company also seasonally deactivates ATMs when tourist activity is low.
In addition, complementary services offered by the company's epay Segment, where it provides prepaid mobile top-up services through POS terminals, strengthen the EFT Processing Segment's line of services. The company plans to continue to expand its technology and business methods into other markets where it operates and further leverage its relationships with mobile operators, other content providers, and financial institutions to facilitate that expansion.
Seasonality
The company's EFT Processing business experiences its heaviest demand for cash withdrawals and DCC during the third quarter of the fiscal year (year ended December 2024), coinciding with the tourism season. It is also impacted by seasonality during the fourth quarter and first quarter of each year due to higher transaction levels during the holiday season and lower levels after the holiday season. This seasonality is increased due to the company's practice of seasonally deactivating ATMs in tourist locations that experience significantly higher traffic during their peak tourist seasons. Seasonally deactivating involves shutting down the ATMs during the slower months and results in lower overall transaction volumes in the EFT Processing Segment during those months. As the company has expanded its IAD network in tourist locations, the financial impact of seasonally deactivating has increased, because it continues to bear the expense of seasonally deactivated ATMs even though they do not generate transactions during the slower months.
Government Contracts
EFT maintains contract relationships with a number of banks, financial institutions, telecommunications companies, and clients whose ownership includes the government.
epay
The company processes and distributes prepaid mobile airtime and other electronic content and payment processing services for various prepaid products, cards, and services on a network of approximately 777,000 POS terminals across approximately 362,000 retailer locations in Europe, the Middle East and Africa, Asia Pacific, North America, and South America. Its processing centers for the epay segment are located in the United Kingdom, Germany, Italy, and the United States.
The company has continued to expand its prepaid business in new and existing markets by drawing upon its depth of experience to build and expand relationships with content providers, mobile operators, and retailers. It offers a wide range of products across its retail networks, including prepaid mobile airtime, prepaid debit cards, prepaid gift cards, other prepaid electronic content such as music, games, and software, prepaid vouchers, transport payments and lottery, and bill payment processing assistance through partnerships with various licensed money transmitters.
Sources of Revenues
The epay Segment generates commissions and processing fees from the distribution of electronic content from mobile operators and other content providers. In 2024, approximately 68% of total revenues and approximately 76% of gross profit for the epay Segment was from electronic content other than prepaid mobile airtime (digital media products).
Customers purchase digital media prepaid content as a gift or for self-use. Content is generally purchased in two ways: Directly online from the content provider using an online payment method, or through physical retail stores, online retailers, or other electronic channels, including payment wallets, online banking, mobile applications, and other sources. Customers using mobile phones generally pay for usage in one of two ways: Through postpaid accounts, where usage is billed at the end of each billing period, or through prepaid accounts, where customers pay in advance by crediting their accounts prior to usage.
Prepaid mobile phone credits are generally distributed using personal identification numbers (PINs). The company distributes PINs in two ways. First, it establishes an electronic connection to the mobile operator and the retailer. When the sale to a customer is initiated, the terminal requests the PIN from the mobile operator via its transaction processing platform. These transactions obtain the PIN directly from the mobile operator. The customer pays the retailer, and the retailer becomes obligated to make settlement to the company for the purchased amount of the mobile airtime. The company maintains systems that track the amount of mobile top-up sold by the retailer, which allows it to bill that retailer for the mobile top-up sold.
Second, the company purchases PINs from the mobile operator, which are electronically sent to its processing platform. It establishes an electronic connection with the POS terminals in retailer locations, and its processing platform provides the terminal with a PIN when the mobile top-up is purchased. The company maintains systems that monitor transaction levels at each terminal. As sales of prepaid mobile airtime to customers are completed, the inventory on the platform is reduced by the PIN purchased. The customer payment and settlement with the retailer are the same as described above.
The company expands its distribution networks by signing new contracts with retailers, and in some markets, by acquiring existing networks. It continues to focus on growing its distribution network through independent sales organizations that contract directly with retailers in their network to distribute prepaid mobile airtime or other digital media content from the retailers' POS terminals. The company is increasing its focus on direct relationships with chains of supermarkets, convenience stores, gas stations, and other larger-scale retailers, where it can negotiate multi-year agreements with the retailers. In addition to the sale of traditional mobile top-up volume described above, the company has expanded distribution into digital media products and other value-added services. It has leveraged its existing technology infrastructure to sell digital media products, which have been sold through its traditional retail network and new retailer networks such as digital channels. In the U.S., most prepaid digital media content is purchased for gifting; in markets outside the U.S., consumers generally purchase prepaid digital media content for self-use.
epay Products and Services
Prepaid Mobile Airtime Transaction Processing
The company processes prepaid mobile airtime top-up transactions on its international POS network for two types of clients: distributors and retailers. Both types of client transactions start with a consumer in a retail store. The retailer uses a specially programmed POS terminal in the store, the retailer's electronic cash register (ECR) system, or a web-based POS device that is connected to the company's network to buy prepaid mobile airtime. The consumer selects a predefined amount of mobile airtime from the carrier of choice, and the retailer enters the selection into the POS terminal. The consumer pays that amount to the retailer (in cash or other payment methods accepted by the retailer). The POS device then transmits the selected transaction to the company's processing center. Using the electronic connection maintained with the mobile phone operator or drawing from its inventory of PINs, the purchased amount of mobile airtime will be either credited to the consumer's account or delivered via a PIN printed by the terminal and given to the consumer. In the case of PINs printed by the terminal, the consumer must then call the mobile phone operator's toll-free number to activate the purchased airtime on the consumer's mobile account.
One difference in the company's relationships with various retailers and distributors is the way in which it charges for its services. For distributors and certain very large retailers, the company charges a processing fee. However, the majority of its transactions occur with smaller retailers. With these clients, the company receives a commission or discount on each transaction that is withheld from the payments made to the mobile phone operator, and it shares that commission/discount with the retailers.
Closed Loop Gift Cards
Closed loop (private-branded) gift cards are generally described as merchant-specific prepaid cards, used for purchases exclusively at a particular merchant's locations. The company distributes closed loop gift cards in various categories, including dining, retail, and digital media, such as music, games, and software. Generally, the gift card is activated when a consumer loads funds (with cash, debit, or credit card payment) or purchases a preloaded value gift card at a retail store location or online.
Open Loop Gift Cards
Open loop gift cards are prepaid gift cards associated with an electronic payment network (such as Visa or Mastercard) and are honored at multiple, unaffiliated locations (wherever cards from these networks are generally accepted). They are not merchant-specific. The company distributes and issues single-use, non-reloadable open loop gift cards carrying the Visa brand in its retail channels. After the consumer purchases the preloaded value gift card at a retail store location or online, the consumer must call the toll-free number on the back of the card to activate it.
Open Loop Reloadable
The company distributes Visa and Mastercard issued debit cards provided by card issuers. It also manages and distributes a proprietary debit card that allows a retailer to issue its own reloadable store-branded card. Open loop reloadable cards have features similar to a bank checking account, including direct deposit, purchasing capability wherever a credit card is accepted, bill payment, and ATM access. Fees are charged to consumers for the initial load and reload transactions, monthly account maintenance, and other transactions.
Other Products and Services
The company's POS network is used for the distribution of other products and services, including games and software, bill payment, lottery tickets, and transportation products. Through its Cadooz subsidiary, the company also distributes vouchers and physical gifts into the business-to-business (B2B) channel, principally for the purposes of employee and customer incentives and rewards, as well as POS promotions where physical goods are sold in large retailers. In certain locations, the terminals used for prepaid services can also be used for electronic funds transfer to process credit, debit, and prepaid card payments for retail merchandise. The company provides promotion and advertising for content providers of their prepaid content throughout its retail distribution network. Additionally, it provides card production and processing services to some of its prepaid gift card partners and telecom content providers.
Retailer and Distributor Contracts
The company provides its prepaid services through POS terminals or web-based POS devices installed in retail outlets, or, in the case of major retailers, through direct connections between their ECR systems and its processing centers. In markets where it operates proprietary technology, the company generally owns and maintains the POS terminals. In certain countries in Europe, the terminals are sold to the retailers or to distributors who service the retailers. The company's agreements with major retailers for POS services typically have one to three-year terms. These agreements include terms regarding the connection of its networks to the respective retailer's registers or payment terminals, the maintenance of POS terminals, and obligations concerning settlement and liability for transactions processed. Generally, the company's agreements with individual or small retailers have shorter terms and provide that either party can terminate the agreement upon three to six months' notice.
epay Segment Strategy
Epay's strategy is to grow revenue and defend margins in developing markets by providing value-added services to mobile operators and decreasing its reliance on mobile top-up by increasing the distribution of other electronic content, expanding epay branded content, introducing new solutions to new and existing customers, and focusing on geographic expansion. Strategic execution behind the expansion of digital media electronic content includes the development of relationships with global consumer product brands. This strategy leverages the global scale of the epay business, allowing global brands to be sold in many or all the countries in which the company has a presence. Examples of global brands the company distributes include iTunes, Google Play, Sony, and Microsoft.
Telecommunications companies and other content providers have a substantial opportunity to increase revenues by diversifying the products and services offered to their retailers. Epay is deploying additional content through its POS network to retailers and distributors all over the world. The reach, capabilities, and quality of the epay network are appealing as a global distribution channel. The company is one of the largest worldwide multi-country operators and believes it has a distinct competitive advantage with the existing relationships that it maintains with prepaid content providers and retailers.
Seasonality
As the product mix continues to change, the epay business is impacted by seasonality during the fourth quarter and first quarter of each year due to the higher transaction levels during the holiday season and lower levels following the holiday season.
Government Contracts
epay maintains contract relationships with a number of companies, banks, post offices, and telecommunications providers whose ownership includes the government.
Money Transfer
The company provides global money transfer services primarily under the brand names Ria, Xe, and Dandelion. Ria offers consumer-to-consumer money transfer services through a global network of more than 608,000 locations and via its website riamoneytransfer.com. The company sends money transfers from approximately 142 countries, with money transfer delivery completed in 196 countries. The initiation of a consumer money transfer occurs through retail agents, company-owned stores, or online, while the delivery of money transfers can occur with bank correspondents, retailer agents, or from certain ATMs. The company's websites and mobile wallet apps allow consumers to send funds online, using a bank account or credit or debit card, for pay-out directly to a bank account or for cash pickup.
In addition, the company provides global account-to-account money transfer services under the brand name Xe. It offers money transfer services via its website (www.xe.com) and the Xe app, as well as through customer service representatives. Xe also provides foreign currency exchange information on its currency data websites (www.xe.com and www.x-rates.com). Through Xe, the company offers cash management solutions and foreign currency risk management services to small and medium-sized businesses.
Lastly, under the brand ‘Dandelion,’ Ria offers payment processing services to third-party partners. Dandelion is a leading real-time, global cross-border payment platform; it offers consumer and business transaction processing and fulfillment with alternative payout channels, such as bank accounts, cash pick-up, and mobile wallets. Dandelion powers cross-border payments for Xe, Ria, as well as third-party banks, fintechs, and big tech platforms.
The company monitors the number of transactions made through its money transfer networks.
The company's sending agent network includes a variety of agents, such as Walmart, large and medium-sized regional retailers, convenience stores, bodegas, multi-service shops, and phone centers, which are predominantly found in areas with a large immigrant population. Each Ria money transfer transaction is processed using Euronet's proprietary software system and is checked for security, completeness, and compliance with federal and state regulations at every step of the process. Senders can track the progress of their transfers through Ria's customer service representatives, and funds are delivered quickly to their beneficiaries via the company's extensive payout network, which includes large banks, non-bank financial institutions, post offices, and large retailers.
Sources of Revenues
Revenues in the Money Transfer segment are primarily derived from charging a transaction fee, as well as a margin earned from purchasing foreign currency at wholesale exchange rates and selling the foreign currency to customers at retail exchange rates. Sending agents and receiving agents for consumer-to-consumer products each earn fees for cash collection and distribution services. Euronet recognizes these fees as direct operating costs at the time of sale.
Money Transfer Products and Services
Money transfer products and services are sold primarily through the following channels: at agent locations, company-owned stores, mobile apps, TeleRia phone, and on internet-enabled devices at riamoneytransfer.com and xe.com. In an online transaction, customers send funds using a bank account or credit or debit card for pay-out at most of the company's agent locations around the world or directly to a bank account.
In addition to money transfers, Ria also offers customers bill payment services, payment alternatives such as money orders, comprehensive check cashing services for a wide variety of issued checks, along with competitive foreign currency exchange services and mobile top-up. The company's bill payment services offer timely posting of customer bills for over 7,900 companies, including electric and gas utilities and telephone/wireless companies. These services are all offered through its company-owned stores, while select services are offered through its agents in certain markets.
Under the brand ‘Dandelion,’ Ria offers payment processing services to third-party partners. The Dandelion cross-border payments platform provides financial institutions, fintechs such as digital wallets and banks, and enterprise software companies access to Euronet's money transfer network through an API connection. This enables these companies to build financial solutions with real-time payment capabilities to the more than 608,000 cash locations, as well as 4.1 billion bank accounts and 3.1 billion digital wallet accounts that the Euronet money transfer network reaches.
Xe offers an account-to-account international payment service to high-income individuals and small and medium-sized businesses, complementing its existing consumer-to-consumer money transfer business. Xe has a multi-channel platform that allows customers to make transfers, track payments, and manage their international payment activity online or through a customer service representative. Xe provides cash management solutions and foreign currency risk management services to small and medium-sized businesses. Additionally, Xe offers foreign currency exchange subscriptions and advertising on its websites.
Money Transfer Segment Strategy
The Money Transfer Segment's strategy is to increase the volume of money transfers processed by leveraging its existing banking and merchant/retailer relationships to expand direct-to-consumer digital products, and Dandelion’s wholesale products through its agent and correspondent networks in existing corridors. In addition, the company pursues expansion into high-potential money transfer corridors from the U.S. and internationally beyond the traditional U.S. to Mexico corridor. Furthermore, it expects to continue to take advantage of cross-selling opportunities with its epay and EFT Processing Segments by providing prepaid services through its stores and agents and offering its money transfer services at select prepaid retail locations and ATMs it operates in key markets. The company will continue to make investments in its systems to support this growth. Additionally, it is expanding its Xe business into new markets.
Seasonality
The company's money transfer business is significantly impacted by seasonality that varies by region. In most of its markets, it experiences increased money transfer transaction levels during the month of May and in the fourth quarter of each year, coinciding with various holidays. Additionally, in the U.S. to Mexico corridor, the company usually experiences its heaviest volume during the May through October time frame, coinciding with the increase in worker migration patterns and various holidays, and its lowest volumes during the first quarter.
Government Contracts
The Money Transfer Segment maintains correspondent relationships with a number of financial institutions whose ownership includes governments of the correspondents' countries of origin.
Competition
The company's competitors include The Western Union Company and MoneyGram International Inc.
Intellectual Property
The brand names of ‘Ria,’ ‘Ria Financial Services,’ ‘Ria Envia,’ ‘Xe,’ ‘Dandelion,’ derivations of those brand names, and certain other brand names, as well as related logos, are material to the company's Money Transfer Segment and are registered trademarks and/or service marks in most of the markets in which the Money Transfer Segment operates. Consumer perception of these brand names and logos is important to the growth prospects of the company's money transfer business. The company also holds a U.S. patent on a card-based money transfer and bill payment system that allows transactions to be initiated primarily through POS terminals and integrated cash register systems.
With respect to its EFT Processing Segment, the company has registered or applied for registration of its trademarks, including the names ‘Euronet’ and/or its related logo, as well as other trade names in most markets in which these trademarks are used. The company has registered the ‘Euronet’ trademark in the class of ATM machines in Germany, the U.K., and certain other Western European countries. It has filed pending applications and/or obtained patents for a number of its new software products and processing technology, including certain top-up services and DCC services.
With respect to its epay Segment, the company maintains registered trademarks for the ‘epay’ brand and logo in the U.S., U.K., E.U. (through a Community Trademark application, which provides enforceability of the epay trademark in all member states of the EU), Brazil, Singapore, India, Australia, and New Zealand. The company has filed trademark applications for additional iterations of the ‘epay’ brand in India, which are pending.
Additionally, the company has filed a trademark application for the ‘epay’ brand with the Madrid Protocol, which, if granted, will simplify the process of extending the international protection of the epay trademark. The company has filed patent applications for certain POS top-up and other epay technology. Certain patents have been granted while others have been refused or are still pending. The company also holds a patent license covering certain of epay's operations in the U.S.
Government Regulation
Certain of the company's European product offerings, including in particular its money transfer services, merchant acquiring, and bill payment products, are regulated payment services requiring a license under the Second Payment Services Directive, or PSD2.
The company's Money Transfer Segment, as well as its agent network, is subject to regulations issued by various state and foreign national regulators who license it, the Office of Foreign Assets Control (OFAC), the Bank Secrecy Act as amended by the USA PATRIOT Act (BSA), the Financial Crimes Enforcement Network (FINCEN), as well as any existing or future regulations that impact any aspect of its money transfer business.
The CFPB (Consumer Financial Protection Bureau) has rulemaking and enforcement authority to prevent UDAAPs in connection with transactions for consumer financial products or services. The CFPB audits the company's compliance with these rules, and it may be subject to fines or penalties for violations of any of such rules.
The company's Money Transfer Segment is subject to the unclaimed or abandoned property (i.e., ‘escheat’) regulations of the United States and certain foreign countries in which it operates. These laws require the company to turn over property held by Euronet on behalf of others that remains unclaimed after specified periods of time (i.e., ‘dormancy’ or ‘escheat’ periods).
The company's operations involve the collection and storage of certain types of personal customer data that are subject to privacy and security laws in the U.S. and abroad. In the United States, it is subject to the Gramm-Leach-Bliley Act (GLBA) and various state laws, including the California Consumer Privacy Act (CCPA), which require that financial institutions have in place policies regarding the collection, processing, storage, and disclosure of information considered nonpublic personal information.
The company is subject to the Foreign Corrupt Practices Act ('FCPA'), which prohibits U.S. and other business entities from making improper payments to foreign government officials, political parties, or political party officials. The company is also subject to the applicable anti-corruption laws in the jurisdictions in which it operates, such as the U.K. Bribery Act, thus potentially exposing it to liability and potential penalties in multiple jurisdictions. The anti-corruption provisions of the FCPA are enforced by the United States Department of Justice. In addition, the Securities and Exchange Commission ('SEC') requires strict compliance with certain accounting and internal control standards set forth under the FCPA. Because the company's services are offered in many countries throughout the world and the company does business with a number of banks and other financial institutions owned or controlled by foreign governments, the company faces a higher risk associated with FCPA, the U.K. Bribery Act and other similar laws than many other companies and the company has policies and procedures in place to address compliance with the FCPA, the U.K. Bribery Act and other similar laws.
In addition to anti-money laundering laws and regulations, the company's products and services are subject to economic and trade sanctions laws and regulations promulgated by OFAC and other jurisdictions in which the company's products and services are offered.
History
The company was founded in 1994. The company was incorporated in 1996. The company was formerly known as Euronet Services, Inc. and changed its name to Euronet Worldwide, Inc. in August 2001.
