MoneyGram International (MGI) Q1 2021 Earnings Call Transcript

MoneyGram International (MGI)
Q1 2021 Earnings Call
May 07, 2021, 9:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the MoneyGram International Q1 2021 earnings release call. Today's conference is being recorded. [Operator instructions] It is now my pleasure to turn the floor over to your host, Stephen Reiff, head of corporate communications. Please go ahead, sir.

Stephen Reiff -- Head of Corporate Communications

Good morning, and happy Friday. Thank you for joining us. On the call with me, you have Alex Holmes, MoneyGram chairman and chief executive officer; and Larry Angelilli, chief financial officer. On the MoneyGram Investor Relations website, you can find our earnings press release and presentation, which is intended to supplement our prepared remarks during today's call and provide the reconciliations between GAAP and non-GAAP financial measures.

We will refer to non-GAAP metrics on the call. The non-GAAP financial measures provided should not be considered as a substitute for or superior to those prepared in accordance with GAAP. They are included as additional clarification items to aid investors in further understanding the company's performance in addition to the impact that these items and events have had on financial results. Please note that today's call is being recorded.

During the call, we will be making forward-looking statements, which are predictions, projections or other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could materially differ because of factors discussed in today's earnings press release and the comments made during this conference call and in the Risk Factors section of our Form 10-K, Forms 10-Q, and other reports and filings with the SEC. We do not undertake any duty to update any forward-looking statement.

And with that, I'll turn the call over to you, Alex.

Alex Holmes -- Chairman and Chief Executive Officer

Thank you, Stephen. Good morning, everyone, and thank you for joining us today. We had a very strong first quarter, and the company is off to a great start for the year on the strength of our digital transformation and the continued execution of our strategy. In the first quarter, revenue exceeded expectations driven by double-digit money transfer revenue growth of 12% and money transfer transaction growth of 14%.

Growth was, again, led by our amazing digital performance with MoneyGram Online soaring to a record-breaking quarter for both customers' revenue and transactions. Excitingly, we also reported a monster April delivering a year-over-year money transfer transaction growth rate of 46% and reporting the largest number of transactions ever for that month. MoneyGram Online also achieved an all-time high for transactions and face value sent in the month. Across every region, our digital business continues to outperform.

It's hard to believe that in just over two short years since we launched our new app, we've built a digital business that has rapidly grown to reach $60 million this quarter. This growth trajectory rivals out of any other fintech across the entire financial services industry, and we could not be more excited. At the end of March, digital transactions accounted for 32% of all money transfer transactions, approximately double the percentage at the start of 2020. This is fundamentally a new company, a new MoneyGram.

We worked hard over the last few years to build a customer-centric modern mobile API-driven organization ready for scale. And today, we're delivering on that vision. At our current trajectory, we expect the digital business to cross 50% of all money transfer transactions in 2024. The momentum in our business has never been stronger, and we're creating tremendous value for customers, partners, and shareholders.

Importantly, as we announced Tuesday, and as you saw in our earnings release this morning, we announced very positive developments as we near the end of our deferred prosecution agreement. We have satisfied our financial obligations under the DPA and have received the final report of the independent compliance monitor, which has certified the company's compliance program. We're extremely pleased to be on track for a timely termination of the DPA and monitorship on May 10, and I'm proud of the industry-leading compliance program that we've built. We have implemented the highest consumer data collection capabilities in the industry and our customer ID verification standards, technology platforms, and data-driven controls have helped to bring consumer fraud rates to all-time lows.

Importantly, these capabilities have also helped to bring our ability to understand and communicate with our customers to an all-time high. The quality of our service has never been better, and our business has returned to growth. All of this undoubtedly ensures we will continue to expand our business while building upon our leading position in protecting consumers. Now turning to Slide 4.

You can see here how the continued execution of our customer-centric strategy, along with the strength of our digital transformation, has enabled the company to win with consumers and capture market share. These pillars, delivering a differentiated customer experience, scaling our digital business, being the preferred partner for cross-border, and capturing new revenue by monetizing capabilities are collectively the backbone of our 2021 corporate strategy. They are positioning the company for sustainable profitable growth, and our financial results strongly correlate to the successful execution of our strategy. The following highlights helped to illustrate this success.

We delivered another quarter of strong MGO customer retention rates of 80%. In March, we reported a milestone reaching our 15th consecutive month of triple-digit cross-border MGO transaction growth, which led to 131% year-over-year increase in revenue for the quarter. And total company cross-border money transfer principal sent increased 36% in the first quarter, a meaningful acceleration compared to the fourth quarter. Additionally, as a result of increasing market demand and our thoughtfully executed digital transformation, we're now launching new initiatives to monetize our cross-border capabilities by opening our platform to new customers and use cases.

In the past, we've talked about our strategy to diversify our revenue streams, and the launch of our new business line, MoneyGram as a Service, is the next evolution of this strategy, the details of which I'll talk about in a few minutes. Now on Slide 5, you see the highlights of the growth drivers surrounding our strategy to scale the digital business. These include the largest component of digital business, MGO, delivering 130% year-over-year cross-border transaction growth. Transactions received digitally via bank accounts, mobile wallets or debit cards grew an amazing 128% and transactions through our digital partners reported 47% growth compared to the prior year.

Taken together, each component helped drive total digital transaction growth of 86% and record digital revenue of over $60 million. At the end of March, the digital business accounted for 32% of all money transfer transactions, an increase of more than 50% compared to the prior year. Our walk-in retail business reported growth in the quarter with strong growth in March and April, led by solid cross-border performance out of the U.S. and Europe.

But again, even as the retail business stabilizes, digital continues to grow as a percentage of overall transactions, thereby expanding the size of the pie and the amount of volume going through our business. Our cross-border MGO growth has been nothing short of spectacular, but as we've discussed, keep in mind, as the business gets larger, we expect these growth rates to normalize in the coming months, particularly as we begin to last year's incredible growth rates. Now I'll spend some time discussing each component of our digital business in more detail, beginning with MGO. MGO is the largest component of our digital business.

And as I mentioned, delivered record highs for customers' transactions and revenue in the first quarter with revenue growth outpacing transaction growth. As I also mentioned, March was our 15th consecutive month of triple-digit cross-border growth, and that was driven by a 106% year-over-year increase in active MGO cross-border customers. Now looking at some of the customer data behind this performance. 85% of all MoneyGram Online transactions in the month were done by repeat customers with more than 80% of our first-time customers being new to the brand.

From a transaction perspective, 86% of all MGO transactions are done on a mobile device, with the app being the largest component. Within the app, our growth rate of monthly active users is accelerating and outpacing the competition. In the quarter, we delivered a 155% transaction growth rate for transactions on the app. From a demographic perspective, Gen Zs and millennials make up about two-thirds of our app users and the average customer lifetime value, or CLV, for an app user remains three times as high as the average retail walk-in customer.

Our digital marketing spend is becoming increasingly efficient and we're driving down our customer acquisition costs as we optimize spend on in-app actions. The point being, tracking app downloads is important, and in many large markets, we're in either the No. 1 or No. 2 spots for downloads.

But to deliver the highest ROI, we need more than just downloads. We need customers who are actually going to register and transact on the app. To that end, we've also enhanced our SEO and ASO tactics to drive more clicks to our app and more transaction customers. As a result, in some areas, we've driven a 10 times increase in transactions, while the cost per transaction has decreased by over half.

These strong results help highlight what we're doing to increasingly get on the offense and push our digital customer acquisition strategy to help scale the digital business to new heights. Now turning to Slide 7. You can see the explosive growth in customers receiving money digitally. So whether to an account, mobile wallet or directly to a card, consumers are increasingly choosing to receive money digitally from the comfort of their own homes.

In fact, in markets such as India and Indonesia, well over 40% of all of our transactions are now received digitally, with these numbers increasing in April. Since Q1, 2018 transactions received digitally have grown at an incredibly strong 68% CAGR. And compared to last year alone, transactions have more than doubled. Visa Direct is once again a strong growth driver, delivering 525% year-over-year transaction growth in the quarter and the largest quarter ever for transactions.

Digitized in the receive side not only meets increasing customer demand but also saves us time and money. Digital receives expand our global network without needing to add physical locations, which are increasingly more expensive to maintain. It also enables a more streamlined and simplified customer experience. Going forward, continued growth in digital receive will remain a top strategic priority as consumers continue to prefer this channel and value our leading network.

Now let's discuss the third component of our digital business, as shown on Slide 8, our digital partnerships. In the quarter, they delivered 47% growth with strong growth volume in cross-border activity, but again, this was partially offset by declines in U.S. to U.S. volumes, a trend which remains consistent.

As a reminder, digital partners as we define them, are essentially agents that are either pure digital companies or the digital side of a physical agent that also have a digital presence. Typically, digital partners are fintechs, banks, telcos, and e-commerce sites in large send markets that bring us customers who are looking to utilize MoneyGram services and global network. This partnership model has been effective for many years, and as consumers increasingly migrate to digital, we expect to see strong growth from our current partners whose customers also have strong retention rates. We have a solid pipeline of new digital partners that will further support growth of this channel, and I look forward to providing updates on these signings as the year progresses.

Turning now to Slide 9. MoneyGram is increasingly being recognized as the leader for progressive innovation in the industry. We're receiving numerous inbound calls each week from new potential partners who want to access our global platform for various purposes. To that end, as I mentioned, we've launched a processing model to open our business to new customers and new use cases, MoneyGram as a Service.

Over the last few years, we've built an API-driven infrastructure that enables us to seamlessly scale volume through our global network, and we're optimistic that this strategic growth opportunity will further help to monetize our capabilities in new ways. The new business line represents significant growth opportunity for MoneyGram as we enter a market estimated to be worth $17 billion in 2024. As you can see here, there are a number of different components to this offering. In the first quarter, we announced our first partnership to enable the funding and disbursement of digital currency with G-Coin.

The partnership provides an easy way to access blockchain-based digital gold assets by providing consumers with expanded access to G-Coin tokens at thousands of new point-of-sale locations. G-Coin's digital innovation, combined with MoneyGram's unique global platform, will make digital assets more accessible to millions of consumers. As crypto and digital currencies rise in prominence, a core barrier to further growth is the on and off ramps to local fiat currencies. MoneyGram is extremely well-positioned to help companies solve these challenges, given our expertise and compliance, our understanding of blockchain, our API-driven infrastructure, which enables instant access to 125 different currencies and, of course, our global cash network.

In the coming weeks, we'll announce an exciting partnership in this vertical. In the quarter, we also launched an as-a-service partnership with Sigue, a regional money transfer company here in the U.S. with a meaningful retail presence across the country. They approached us about accessing our payout network, and we've opened our global platform to them.

Opening our global platform to companies like Sigue enables us to access new customers and locations we otherwise wouldn't have access to, and it also enables us to increase payment volumes through our network and process additive transactions. Our scalable infrastructure can absorb significant volume at very low marginal cost. Again, these offerings are new, and they will take time to ramp, but we've set ourselves up for success, and we have the opportunity to generate meaningful processing revenue streams in the years ahead. Our strategy to capture new revenue by monetizing our capabilities is an immense differentiator and an important component of digital transformation, which is driving value for consumers, partners, and importantly, shareholders.

And with that, I'll turn the call over to Larry to discuss our strong financial results in the quarter.

Larry Angelilli -- Chief Financial Officer

So as Alex described, the company returned to double-digit growth in both transactions and revenue in the global money transfer business in the first quarter. Money transfer revenue was up 12% with transactions up 14% year over year on a reported basis. Total cross-border principal increased 36% and as we've seen our customers sending larger amounts in addition to sending more frequently. This was largely driven by the continued triple-digit growth of MoneyGram Online.

MoneyGram's total revenue of $310 million for the first quarter was up over $19 million or 7% from last year. This more than offset the declines in our bill payment business and financial paper products. And also, we continue to experience lower investment income which was down approximately 80% from last year due to the zero interest rate environment. As a result, with the continued rapid growth of MGO, our revenues within the core money transfer segment have never been this diversified.

Agent concentrations are now at their lowest point in addition to the Walmart marketplace reaching its lowest proportion of money transfer revenues. And from a geographic perspective, international sends now represent 61% of money transfer revenues and U.S. outbound sends represent 34%. These trends all point to a future with continuing growth, unburdened by the concentrations of the past, which in turn, have substantially lowered the company's risk profile.

The chart on Slide 12 is an illustration of the significantly improved quality of the company's adjusted EBITDA. As we've been discussing, there have been also material changes to the company's expenses, improving the quality of EBITDA and adjusted EBITDA in the quarter. By far, the largest of these changes was not reporting any Ripple incentive payments, which were $12 million in the first quarter of last year. And as a reminder, Ripple incentives are recorded as negative or contra expenses.

During the quarter, transactions and operating expense was higher than last year. But excluding the Ripple benefit, T&O would have been $6.7 million favorable year over year driven by our continued operational efficiencies. Compensation and benefits were higher primarily due to $6 million in employee severance expense, which was related to the restructuring that we've previously announced. Also shown on Slide 12, adjusted EBITDA on an as-reported basis was $50 million versus $51 million from the first quarter of last year.

This is also an illustration of the value of our digital transformation and its impact on the turnaround of the core business, which is driving a materially higher quality of EBITDA. Following the end of the DPA, we're anticipating significant conversion between EBITDA and adjusted EBITDA in the second half of the year. However, we will still have DPA-related expenses in the second quarter. It's notable that we were able to accomplish these fundamental improvements to our revenues and EBITDA during the seasonal low quarter of the year for volume and revenue.

The company had $153 million in cash and cash equivalents at March 31. This reduction from the December 31 balance is normal for the first quarter, primarily due to employee bonuses and incentive payments that are made in February and March. The first quarter also tends to be a seasonal high point for sign-on bonuses as well. Company is continuing to pay cash interest instead of payment in kind on its subordinated debt, which also had an additional impact on cash.

As we reported, MoneyGram paid the final amount due to the Department of Justice in April. Following this payment, we remain within our targets for normal levels of working capital. With the continuing momentum we've seen in the money transfer business so far in this quarter, we have begun to rebuild our cash balance. We would also like to provide our outlook for the second quarter of 2021.

The company anticipates total revenue in the range of $315 million to $325 million based on continuing growth in the money transfer business. This range includes a potential revenue impact of up to $10 million related to the rollout of the new competition at Walmart. And it also recognizes that there are still significant uncertainties around the potential impact on pricing and volumes, especially since this rollout is still in its early stages. Also included in this outlook is the expectation of declines in investment income versus last year.

The company anticipates adjusted EBITDA in the range of $50 million to $55 million for the second quarter. This also reflects the potential impact from Walmart. And consistent with the first quarter includes zero incentive fees from Ripple, which were approximately $9 million in last year's second quarter. And with that, I'll turn the call back over to Alex.

Alex Holmes -- Chairman and Chief Executive Officer

Great. Thanks, Larry. Our results for the quarter continued to demonstrate the momentum in our digital business and our ability to operate with increased efficiency and the agility to overcome challenges. Our innovation is winning with consumers and our growing digital channel, along with our new business line, MoneyGram as a Service, have established the foundation for MoneyGram's long-term sustainable growth and profitability.

Looking ahead, we're now increasingly on the offense. We're accelerating out of the past year by investing in strategic growth areas, continuing to innovate in the market, and leveraging the strength of our digital transformation in new ways. MoneyGram is truly leading the evolution of digital P2P payments. And with that, I'll turn the call over to the operator to take your questions.

Thank you. Operator?

Questions & Answers:

Operator

Yes. Thank you. [Operator instructions] We'll take our first question from Kartik Mehta with Northcoast Research.

Kartik Mehta -- Northcoast Research -- Analyst

Good morning, Alex and Larry. I guess just from a DPA standpoint, I guess what's left in terms of having to pay the government? I think there's a $55 million reserve. And I'm just wondering when you'll know the final payment or if you already do?

Larry Angelilli -- Chief Financial Officer

No. That was the payment we made in April, Kartik. So that payment has already been made and all of our financial obligations are concluded.

Alex Holmes -- Chairman and Chief Executive Officer

Yes. Despite our best efforts, we did not get any relief on that number. So, yes, we ended up paying that in April. And at this point in time, Andy and I have responsibility to provide a certification on May 10 to the government.

And then they take that to court and file it for dismissal. So we are definitely on our way out.

Kartik Mehta -- Northcoast Research -- Analyst

And then just from a Walmart standpoint, I know it's early. But what kind of expectations have you built in for second quarter? And have you seen any change in transactions? I know it's early, but just any kind of experience you've seen there.

Alex Holmes -- Chairman and Chief Executive Officer

Yes. Sure. Happy to take the question. So far, it looks like Western Unions rolled out to about a third of the stores.

The pricing on the Walmart world looks to be consistent with the prices that have been there for quite a while, which is the four, eight, and 16. The branded product that they put in kind of either matches what our prices were or undercut us a little on some of the upper band. And there seems to be some promotional FX rates going on, at least I think they're promotional, a couple of them are zero, Mexico being an example. So we've pivoted a little bit.

We've done a few different things with our branded product matched a couple of prices here and made some changes to cover that. So far, we've seen very little impact, if any at all, on the business, and we continue to perform extremely well. I think we're very well-positioned going forward. From uncertainty perspective, we built in about $10 million of revenue impact into the guidance that we gave you.

At this point, I really don't know if that's the right number, but we feel really good about our position to continue to compete, and we have kind of all hands on deck on that. So I think this will be a bit of a telling quarter as they finish their rollout and kind of move through the Mother's Day and eat holidays.

Kartik Mehta -- Northcoast Research -- Analyst

And then just one last question, Alex. Just from a pricing perspective, I know transaction growth and revenue growth were only 2% apart. And I'm wondering what you're seeing in terms of pricing in the business?

Alex Holmes -- Chairman and Chief Executive Officer

Yes. I mean, pricing continues to be pretty aggressive. On our part, we continue to try to match and cover whatever we're seeing in the marketplace. And, obviously, as we've talked about lead to the extent possible in the online world.

We are seeing and a lot of the retail competition, a lot of what we kind of refer to as negative FX rates or you can actually get more money on the receive side than the market rate would otherwise indicate. That tends to be something that we see more broadly here in the U.S. Some of the smaller or even some of the larger competitors beginning to play in that game a little bit. Globally speaking, I think from a pure fee perspective, it's been consistent, but there has been, I'd say, arguably some more aggressive stances on FX rates lately.

Kartik Mehta -- Northcoast Research -- Analyst

OK. Thank you very much. I appreciate it.

Operator

And we'll go to our next question from Ramsey El-Assal with Barclays.

Ben Budish -- Barclays -- Analyst

Hey, guys. This is Ben on for Ramsey. I wanted to just follow up back on the April performance. And I apologize if I missed it.

Can you kind of recap what you're seeing through April in terms of digital versus retail transaction growth? And perhaps, it might be helpful if you could give us a sense of what that looks like on a two-year CAGR kind of smoothing over for the impact of COVID last year.

Alex Holmes -- Chairman and Chief Executive Officer

Yes. Smoothing out COVID is always a little bit of a tricky exercise. I'm going to go ahead and pass on your offer to actually do that math for you. But the growth -- we put up transaction growth of 46%.

We had the largest number of transactions in the month of April that we've ever had in the month of April. So I think that kind of gives you some idea of the fact that not was it just a strong grow over of last year, but also we put through a materially large amount of transactions than we ever have. So it was strong growth, but it's also pure transaction numbers as well. In the online space, and this sort of reflects more broadly, digital, we had an all-time high for transactions and the amount of principal that went through the online business as well.

So collectively, extremely strong April. And Larry will probably punch me, but through six days of May, we're cranking about similar rates. So it's been a very strong start to May as well. So very exciting for us.

And that's really across a significant number of our markets, and we are seeing good strong growth in the walk-in world, at least in March and April, which were accelerated out of kind of January, February, which were a little soft to the walk-in business. So generally speaking, very, very good to see across the board in terms of, generally speaking, money transfer growth.

Ben Budish -- Barclays -- Analyst

OK. Great. If I could kind of along the same lines, I'm just kind of curious, in quarters where you've seen like cross-border travel kind of resuming, are you seeing any like change in transaction volumes? I think investors -- and we always kind of wonder about like the informal channels, which are I guess, like impossible to kind of quantify, but where orders have opened back up, are you seeing any kind of -- are people putting cash in their pockets and getting on airplanes again? Or is that impacting transaction volumes? Or are things kind of continuing uninterrupted?

Alex Holmes -- Chairman and Chief Executive Officer

No. I really couldn't say, honestly, that anywhere where we have employees and people watching the business really believe that there's any increase in cross-border travel of any significant amount that's helping or changing the business flow at all. In fact, I think the principal, up as much as it's been in the fourth and the first quarter, I think, is reflective of the fact that people are still not traveling and staying home and sending more money. And to your point, I think oftentimes, people do travel with the money they bring gifts, they buy things, right, and they take it with them.

And in this case, they continue to send more. We recently did a survey, talked to a number of consumers in the online world and talked about them sending more principal and they continue to believe that or feel very strongly that loved ones around the world and the receive side are in need of more money than they've had before. And we definitely saw on the days where stimulus payments hit bank accounts, we definitely saw surges in online sends in those respective days right after. So I think most people are not traveling at this point in time.

Ben Budish -- Barclays -- Analyst

OK. That's helpful. Thanks so much for taking the questions.

Operator

We'll take our next question from Tien-Tsin Huang with J.P. Morgan.

Tien-Tsin Huang -- J.P. Morgan -- Analyst

Hey. Thanks so much, guys. Great results here. I think just on the -- to build on that, I know I asked last time, but just thinking about stimulus and reopening and how to disaggregate the stimulus piece, thinking about trends.

Is there a way to do that, Alex? I know we've been asking this for a lot of our companies just to better model trends. I know there's a lot of momentum with digital as well. So is that something that you've considered or looked at deeper?

Alex Holmes -- Chairman and Chief Executive Officer

Yes. A little bit. It was interesting. I can't remember the exact day, whether it was like March 10 or 15 or whatever it was, but those first round of -- the latest first round of stimulus checks that hit, literally, the next two days online, we just saw transactions boom.

So those are kind of one-, two-day scenario. So it was hard to see other fluctuations. I think when that second round hit like a week or two later, we saw a similar reaction. But it's a very short time period.

So we almost literally see money hit bank accounts and then go forward. What was interesting was our survey that we did sort of a bit contrary to that, I think only about 10% to 20% of people said that they actually sent their stimulus checks, but I would say that I guess, we surveyed the wrong people because our results would say differently. But, yes, I do think it's made a big difference. I don't know that I could say it's necessarily correlated to the strength in growth in the walk-in space, in particular, it's hard to see as it kind of gets more spread out and dispersed.

But it certainly makes a big difference. You see the opposite trend as well in places like France, Germany, and others, when they went back into lockdown, you can definitely see that walk-in business completely slow and then the online business surge a little bit. But we're on the margin here at this point in time. I think a lot of the shift that we've seen has been relatively permanent shift.

And so I think the stimulus checks definitely helped in terms of amount of principal being sent in the quarter, but I don't think it was the only driver.

Tien-Tsin Huang -- J.P. Morgan -- Analyst

Yes. No. Agreed. And either way, it drives engagement.

So --

Alex Holmes -- Chairman and Chief Executive Officer

For sure.

Larry Angelilli -- Chief Financial Officer

Yes. Fantastic.

Tien-Tsin Huang -- J.P. Morgan -- Analyst

Just trying to understand that. I know a lot of your digital statistics prove that out. So just my follow-up, just on the walk-in piece. If you were to index it to 2019, sort of building on what you've said before, how do you see that trending for the rest of the year? I know Walmart complicates it a little bit.

But big picture, how do you think the walk-in business will look here in the second quarter or maybe better going into the second half of the year?

Alex Holmes -- Chairman and Chief Executive Officer

Yes. I think your point is a good one on Walmart. I think we have to hold that a little bit neutral. I would say all things being equal.

If you normalize for Walmart or just take it out of the question, I would say that I would anticipate kind of what we're looking at which would be kind of mid-single digits. I think the question is what happens with lockdowns. I think there's talk that Europe is going to reopen in kind of June, July and some borders will start to open in maybe the summer. But until that comes, I think it's still a little bit of an open question.

But just kind of based on trend, that's the bit of our expectation. I think there's been a little bit of trash talk swinging around just in terms of our view of walk-in business. And actually, our team around the world has done an amazing job with it. Our retail business is probably as strong, if not stronger than it's been in a number of years.

And again, all that's against the backdrop of what I consider to be the best compliance standards out there. And so to get growth off of that, with consumers coming in, particularly in sends to Latin America and the Caribbean and out of Europe to sends down to Africa and Eastern Europe, continuing to build and strengthen and grow, I think, is indicative of where the market has kind of transformed to in the fact that our compliance standards, again, which also were kind of used against us by all the competition actually are beneficial to us and are helping customers and are not really hurting our business anymore. So I'm very proud of that and something that we'll continue to do. So again, I think the digital side is so strong with the CLV of three times, you want to put your focus there on the online growth in the business, and you want to continue to put the investments going forward into strengthening that position.

Consumers are stickier. You're getting more adoption to it. And especially as you trend downward, you pointed out, two-thirds of our customers are millennials and Gen Zs. And with that sort of direction and the strength of digital, it's just intuitive to me that that's where the business is pivoting to.

And not to say that the walk-in business is going to collapse or go away, it's just I think the momentum is just continuing to shift toward digital properties and assets around the world. And I think that's just going to be the trend that we'll see permanently going forward. So look, I'm extremely pleased with where we are as a company. We've got kind of one big challenge here with Walmart, but it's not something we're not used to, and it's something that we're prepared to address.

And outside of that, I think we look forward to a good year, holistically.

Tien-Tsin Huang -- J.P. Morgan -- Analyst

Yes. You guys definitely handle a lot of these challenges. And so I'm sure you're looking forward to May 10. Make sure you keep that pen after you sign it.

I feel it if they are happy.

Alex Holmes -- Chairman and Chief Executive Officer

Yes. Happy signing day. Yes.

Tien-Tsin Huang -- J.P. Morgan -- Analyst

Thank you, sir.

Operator

Take our next question from Mike Grondahl with Northland Securities.

Mike Grondahl -- Northland Securities -- Analyst

Hey, guys. First off on the DPA. Could you kind of remind us getting that lifted, what you think that does for the business overall? Just if you could kind of talk through that a little bit. And then kind of where your head is on the debt refi and what you think you can accomplish there?

Alex Holmes -- Chairman and Chief Executive Officer

Yes. I'll take the first one, and I'll leave the hard one for Larry. It's a really great question. I don't think a lot of people really -- unless you sort of lived through it, it's hard to get perspective on it.

But one of the things I can say about having the DPA and the monitorship is certainly, it forces you to think differently and completely, in our case, anyway, reinvent ourselves. We've talked a lot about just kind of basically saying, look, the old model is the old model, and we're switching to a consumer-first data-driven decision-based organization. And the amazing part of that is as painful as it was to get there. We now know everything we could possibly know about our customers.

Right? Where they're transacting, time of day, who they're sending to, how frequent. I mean, just anything you can possibly imagine about a customer, including right down to their age. Their propensity to send a different currency rates, etc. So it's pretty amazing what we've been able to build on the back of that.

But it all sort of began with the idea of you have to know who your customers are on both the send and the receive side, and you've got to push that forward. I guess from a contextual perspective, We've spent an extraordinary amount of money fighting this thing over the past eight or nine years. I think I joked at one point that our Chief Compliance Officer, Andy started in 2015, and he's never known a world where someone didn't question every decision he's ever made. And I don't -- again, it's really hard to impart upon people who haven't been there to explain what that really feels like that every single decision you've made, questioned.

And not necessarily a question for the wrong reason, but it forces you to explain every decision you ever made. And that's a lot of wear and tear on an organization, that's a lot of burden. And it's pretty amazing to be able to wake up on May 11, and be able to drive decisions without someone double-checking those decisions. And so in some respects, I'm coming up on my 12th year here, and 75% of that time has been under a monitorship.

And so to be able to come into work and actually drive the business and make decisions and kind of -- it's a bad word, but to say kind of be free to sort of drive that decisioning without question is a pretty freeing feeling and I think it's going to have a tremendous morale impact on the business. And I've also joked over the years about being sold again. I mean, whether it's been Western Union or Ria or Intermex, they've told every agent that we're going out of business. They've told every partner around the world that our compliance is terrible, and we're the worst company ever.

And I think it was all a bunch of nonsense, but they use it to sell against you. So they don't have that anymore. It's also a tremendous feeling as well. And I think we've built an incredible consumer data collection capability and to be able to kind of leave with that now and drive the business is extremely exciting.

And I'm very proud of that, and I'm proud of the whole team that helped us get here and everyone that's had a part in that along the way. And it's been a long road, but we're ready to go. So it's exciting, and I kind of feel like I'm packed and ready to go to college. So it's saying bye to mom and dad.

Larry Angelilli -- Chief Financial Officer

Hard to follow that. But I'll answer the debt question.

Alex Holmes -- Chairman and Chief Executive Officer

Well. But listen, it actually -- Mike, it feeds right into the answer to the next question because there's been a handcuff on.

Larry Angelilli -- Chief Financial Officer

Well, that's a gate. I was just going to say, I mean, this was a gate to our being able to address our capital structure, and that's the first gate now that's open. And the timing, we still have call protection on both tranches of the debt. Those call protections come down at the end of the second quarter.

So we're in a process now where we're evaluating the market reception to different ideas that we have. We need to make sure that the credit story addresses both the release of the DPA and then also the improvements of the company. And I think some of the momentum that we've got going in this quarter is also helpful. So we're on schedule right now to start addressing the credit issues now that this gate is open.

And we'll be targeting something that can address the capital structure when the call protection steps down in July. So I think we're kind of on schedule right now for something of that order.

Mike Grondahl -- Northland Securities -- Analyst

Got it. And maybe one more, Alex, if I could. MoneyGram as a Service, I think, is pretty interesting. You mentioned G-Coin as a first customer.

And you said another one might be coming or another exciting one might be coming soon. Can you just, I guess, highlight again or remind us how G-Coin is using MoneyGram and maybe the other types of customers you're talking to?

Alex Holmes -- Chairman and Chief Executive Officer

Yes. Absolutely. So in the case of G-Coin and actually, the customer will be announcing hopefully next week. Effectively, they've built like a lot of people have these days, they built online platforms that allow consumers in the case of G-Coin buy gold as a digitized token.

And in the case of the other one, it's going to be actually buying crypto. And so consumers have various entry points into these wallets and these capabilities, but oftentimes requires linking your bank account or debit card or credit card, which obviously is increasingly on the rise, but not necessarily something that everyone has access to, particularly as you go downstream on the demographic scale. So when you think about kind of the rise of crypto, the interest in it, the demand in it, whether those are sort of your general Bitcoin type things or digitized gold in the case of G-Coin or whether it's something as new as kind of a USDC or a stablecoin. Getting cash in and cash out of that wallet is really an important focus of many of these new platforms as they seek to give customers flexibility.

One of the easiest things to do, I think, is link a bank account and buy some crypto. Well, maybe. But selling it and getting your cash back is a whole different question. And so the ability for anyone to walk in to a MoneyGram location and load that wallet or unload that wallet is a pretty exciting service opportunity, and there's other, I guess, dimensions of that as you kind of think about it going forward.

But that's it in its simplest form is really kind of bringing a lot of that digital world a little bit more mainstream through the cash in, cash out rails that we operate.

Mike Grondahl -- Northland Securities -- Analyst

Got it. Thanks a lot, guys.

Operator

Thank you. We'll take our next question from David Scharf with JMP Securities.

David Scharf -- JMP Securities -- Analyst

Good morning. Thanks for taking my questions. Hey, Alex. I just have one kind of more high level or, I guess, strategic.

I'm not sure how much you want to speculate on this. But reflecting on opening up the payer network to Sigue or part of it as well as the conversation you just had on MoneyGram as a Service. And then in the broader context of what may have been a Guinness Book of World Records for a number of times digital was said in 20 minutes.

Alex Holmes -- Chairman and Chief Executive Officer

Thank you.

David Scharf -- JMP Securities -- Analyst

Yes. It wasn't -- it certainly was a lot.

Alex Holmes -- Chairman and Chief Executive Officer

I would go for it though. I'll have to let them know that you validated it.

David Scharf -- JMP Securities -- Analyst

Yes. Well, listen, at the end of the day, the message is loud and clear, and it's what's prompting this question. Is it -- I mean, what are the structural in any other barrier to ultimately whether spinning out or any other kind of structure just making MoneyGram Online, a separate business from the walk-in business?

Alex Holmes -- Chairman and Chief Executive Officer

I think that there's -- structurally, I would say in its simplest form, it's really probably your what you want to do from a partnership perspective with the core MoneyGram business. And I would argue today that a lot of digital is interoperable. While digital is pretty exciting in terms of growth and where it's going, a lot of digital sends are paid out in cash and a lot of actual cash spends are sent into accounts. Right? So there's a little bit of a symbiotic relationship there, I suppose.

And at the end of the day, there's a lot of sharing of technology and then there's a considerable amount of overlap, obviously, with licensing and bank accounts and all those pieces. So could you separate it out? Absolutely. Is it easy to do? Probably not easy, but it's probably doable. I think the question becomes how do you operate it going forward? And then sort of what does that look like from a short-term, long-term relationship with effectively, at the end of the day, your payer network? But it's a good point, right, because if you think about MoneyGram, interestingly enough, and you could probably care less about this, but the way it's actually sort of system utilized today from how we sort of operated in the cloud is it's actually MoneyGram Online in all of its websites around the world are all sort of agents in that sense.

Right? So they are kind of in that way, doing what you're saying, right, which is basically utilizing the MoneyGram rails to push and pull transactions. And so in that respect, it's definitely something that could be separated. I think it really becomes a question of long-term value. I mean, it was just -- sorry, Dave, I just finished and just say we're projecting right now the next couple of years for 50% of the business to be digital.

At which point in time, you could argue that the business is as much digital as it is cash. And so is there a point in separating at that point? So --

David Scharf -- JMP Securities -- Analyst

Well, that was the metric that sort of caught my eye and it got me thinking. And I guess, your comment about Sigue, I think really sort of brings to the forefront. I mean, isn't that a test case or of how effectively transfer pricing would work between an independent MoneyGram Online and the MoneyGram payer network? I mean, that's sort of -- because I would imagine the network as a stand-alone business would have to open up its payout capabilities to other remittance providers?

Alex Holmes -- Chairman and Chief Executive Officer

Well, I think it -- yes. I mean, I guess I look at it maybe a little bit differently, which is today online and retail walk-in at MoneyGram don't have a choice, but right to work together. I would say Sigue has a choice, right, which is to try to build its own network or in countries that they don't operate in today where they can partner with us and send those transactions through. So I think in that sense, it's a test case for what you would argue probably historically is more of a competitor in a subset of what we do.

And yet, it's actually a big opportunity for both parties to benefit from that relationship, which, again, coming full circle is a little bit how we look at the online business today, which is it's an agent in the country sending transactions. And so where do those transactions need to go. And that's -- yes. That's kind of the same thing.

I think from a transfer pricing perspective and how we sort of look at separating assets and pulling those apart, I think that's more of a financial question. It comes back to regulatory and banking and all sorts of other compliance oversight and things that get a little bit complicated from initial blush, I suppose. But yes -- no. I mean, nothing to say you couldn't do it.

But I think we'll see how the business evolves and then we can always make decisions as we go forward, just depending on how things actually play out over the short to midterm.

David Scharf -- JMP Securities -- Analyst

Got it. Now it's going to be a fast thing to see how it unfolds. I mean, ultimately, I think that's probably the answer to the question of when does digital actually become digital? And -- right?

Alex Holmes -- Chairman and Chief Executive Officer

Yes. Well, it's probably like everything in life, probably digital becomes less of a channel and more of a habit. Right? And it sort of interoperates with everything that you do today. I mean it's ironic, right, that there's a global chip shortage right at the time where everything is becoming digitized, even down to cars and washing machines and everything else.

So it's definitely a fascinating time to say the least.

David Scharf -- JMP Securities -- Analyst

Right. Great. And let me just add my congrats on wrapping up the DPA. I know it's been a long, long haul.

Alex Holmes -- Chairman and Chief Executive Officer

Thank you. I'm sure you are almost tired of asking me about it. So you can focus on other stuff now. So thanks, Dave.

I appreciate it.

Operator

We'll go to our next question from Rayna Kumar with Evercore ISI.

Rayna Kumar -- Evercore ISI -- Analyst

Good morning, Alex and Larry. Thanks for taking my questions, and congratulations on the DPA as well. It's good to see that. So you just mentioned digital over the next few years could be 50% of the overall bucket for MoneyGram.

That's a big number. Could you talk a little bit about what key investments you think you need to make to get to that level of digital top line? What other key markets do you think you would need to add as well as what capabilities would you like to implement in the digital experience?

Alex Holmes -- Chairman and Chief Executive Officer

Sure. No. It's a great question. I think there's a variety of factors at play.

I think the most exciting pieces of it are really around capabilities and online focus with respect to the customer experience and the app and how you really begin to drive more adoption in more markets and countries around the world. We're experimenting, I should say, with things today like receiver apps, we're pushing low bandwidth apps as well into various markets as well to sort of test and pilot, how they work serious investment into the look, the feel, the design is something that will be at the forefront as we go forward. But beyond that, there's also what other capabilities you can drive onto the app as well, ancillary services, and that's something that we'll probably be talking about a little bit more down the road, maybe in the second half of the year in terms of other ideas to change that. Clearly, the investments that we've been making in marketing, I'd say, are kind of critical to continue as we go forward.

When you start talking about SEO and ASO optimization and really think about in-app activity, it's pretty critical that you're not just out there getting downloads, but you're actually out there getting active users and transaction growth off of that and how do you continue to increase active users. The other investments we're going to be making are really into a lot of things, which may seem pretty normal or kind of mainstream, but definitely new for us. So we want to put a lot more activity into actual direct to consumer. We've talked so much about that, yet we don't necessarily lead today with controls and rules and the way that our system really operates with that customer information first.

Right? We still do a lot of things based on corridors and countries, and there's an opportunity to kind of reverse engineer that. And the important part of that is that you need to begin to treat those customers very differently and distinctly depending on who they are and kind of how they score. So creating more dynamic, scoring and onboarding bureaus, etc., for consumers in various markets will be a big component of that going forward and then using pricing tools much more dynamically and then looking at things like high-dollar senders and how they kind of fit into the mix and begin to sort of scale up is really an important aspect of where we want to go. And then lastly, there's a limitation on expansion of the direct consumer because of license limitations in countries today.

Right? So either getting licenses or getting partners in markets that we don't have them today, trying to figure out how to open business lines in countries that are a bit far afield is something that we're very much interested in exploring. We've had great success with partnerships in those markets, but to go directly into those markets would be a big opportunity for us as well, and we're kind of laying the groundwork for that today.

Rayna Kumar -- Evercore ISI -- Analyst

Great. That's really helpful, and if I can ask a second question. So what kind of business trends are you seeing in India given the severe COVID-19 pandemic in the country? If you can comment, are you seeing a positive or negative impact as we're now in May.

Alex Holmes -- Chairman and Chief Executive Officer

Yes. Absolutely. Yes. And first and foremost, our thoughts and hearts go out to everyone in India.

We obviously have a large number of staff and -- that have family and friends or actually live there today. We actually -- and not in India, but we had an employee pass away in Indonesia. So obviously, just very recently and obviously, devastating in so many ways. And so to keep the business going is critically important.

I think for India, for us, we've been very, very fortunate to have a wonderful account deposit network, and we've actually continued to see growth in India accelerate and is probably reaching or surpassing sort of all-time highs in terms of volume into the country despite what's happened with COVID. Obviously, the walk-in business has become a much smaller portion of what we do. I think at the end of -- was it end of March or in April, we hit almost 50% of the volume into the country was digital. So at the end of April.

So that continues to surge. What's really amazing is it's hard to find a received country in our network right now that isn't growing at an extraordinary rate despite kind of the lockdowns and the challenges with COVID. But again, a lot of that has been that shift to the digital receive side. So India for us at the moment is extremely strong.

Larry Angelilli -- Chief Financial Officer

Yes. The amount of face in Indian rupee-denominated payments that we're sending there is something that we've never seen before. Our trading and our currency is the highest that I've seen since I've worked here. So that money is going to accounts, and there's a tremendous inflow of rupees going to India right now.

Rayna Kumar -- Evercore ISI -- Analyst

And just to clarify, was that in the March quarter? Or is that more into April and May?

Larry Angelilli -- Chief Financial Officer

It's building.

Alex Holmes -- Chairman and Chief Executive Officer

Yes. Yes. It's been building. It's kind of been a consistent month-over-month trend.

Yes.

Rayna Kumar -- Evercore ISI -- Analyst

Great. Thank you.

Alex Holmes -- Chairman and Chief Executive Officer

Thanks, Rayna.

Operator

Take our next question from Cris Kennedy with William Blair.

Cris Kennedy -- William Blair & Company -- Analyst

Hey, guys. Thanks for taking the question. Just following up on that investment answer, should we think about the current margin profile being sustainable? Or would you invest more reduced margins to capture that growth?

Alex Holmes -- Chairman and Chief Executive Officer

No. I don't think -- I think margins are in really good shape right now. In fact, we have a lot of initiatives to try to continue to push them.

Larry Angelilli -- Chief Financial Officer

Yes. And actually, as we achieve scale, it actually should improve margin.

Alex Holmes -- Chairman and Chief Executive Officer

Yes. So, no, the investments, a lot of them have been built in. I think we've done a really nice job on that, and we've kind of shifted a lot of that focus and emphasis across. Right? So we have a couple of big projects going on right now.

One is our cloud migration, which is going to give us a lot of enhanced ability over the next really, 18 months as we kind of deliver that and the rest has really been investments into either the consumer direct side, online, and expansion of products and services and investments in innovation, and then we continue to enhance our point-of-sale systems for agents as well as that environment continues to get a little bit more competitive, but those are really the three main buckets. And where -- I'd say, generally speaking, behind all that has been large investments as well into data analytics and capabilities around everything customer and as we refer to it as Customer 360. So really exciting stuff and nothing that I think you would see a significant increase in, for sure. It's sort of built into the run rate in the numbers, and I think we're in good shape, good teams there.

And they're building every day and delivering more and more and getting, I'd say, more efficient as we go, which is great.

Cris Kennedy -- William Blair & Company -- Analyst

Great. And then just quickly follow up on the digital business. Are you still planning to provide segment information for that going forward?

Alex Holmes -- Chairman and Chief Executive Officer

Yes.

Larry Angelilli -- Chief Financial Officer

Yes. We expand the disclosure around digital and MGO.

Alex Holmes -- Chairman and Chief Executive Officer

Yes. Yes. MoneyGram Online, in particular, and that's kind of in the works and running some things in shadow, making sure that we've got it the way we want it. But, yes, that's still on the road map.

Thank you very much. Operator, I think we've hit the top of the hour. So again, thank you everybody for all your questions and your time and participation this morning and look forward to following up with you in the next couple of days. Thanks.

Operator

[Operator signoff]

Duration: 60 minutes

Call participants:

Stephen Reiff -- Head of Corporate Communications

Alex Holmes -- Chairman and Chief Executive Officer

Larry Angelilli -- Chief Financial Officer

Kartik Mehta -- Northcoast Research -- Analyst

Ben Budish -- Barclays -- Analyst

Tien-Tsin Huang -- J.P. Morgan -- Analyst

Mike Grondahl -- Northland Securities -- Analyst

David Scharf -- JMP Securities -- Analyst

Rayna Kumar -- Evercore ISI -- Analyst

Cris Kennedy -- William Blair & Company -- Analyst

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