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investments, and we feel like we have the platform and the mechanisms to do that, that's a pretty attractive place to deploy capital. And that really is the primary focus. And then if you think about paying out for an acquisition on top of that, it's pretty hard to get there and justify the numbers.
RICK LEGGETT: Last question, so given that outlook, if you really look out very long term, what are the barriers to capturing 20 to 30% share of this business if it becomes more and more a scale business.
PHIL MILNE: I think it's crisp execution of the management team and the employees of MoneyGram International. I think the opportunity is there for us to grow very rapidly, to continue to grow very rapidly in this business. So it's getting out, getting the global footprint, getting the signs up, supporting the activities with marketing dollars, supporting the agents and crisp execution. Tony, I mean, why don't you jump on that one?
TONY RYAN: Yes. Well, I think it, again, it comes back to -- I think you look at the activities in terms of compliance. We have to stay on top of that equation. We have to hire the right number of people and the right talents into the organization to capture the opportunity. But I think as Phil said, it comes down to execution and I think we've executed from 1.6% to 4% market share and now we've got to execute and take the next percentage of market share. And I think we have a formula to do that.
JUDSON BROOKS, ANALYST, HARRIS ASSOCIATES: Judson Brooks, Harris Associates. Two questions. One is help me understand your cost position compared to your largest competitor. And the second question is when you think about the business say five years from now, the role of alternative payments and in particular I'm thinking of mobile phones and ATM-based products, how that will affect profitability?
UNIDENTIFIED COMPANY REPRESENTATIVE: On the cost side, I guess what we're focused on is our own shop and what we're trying to do gain efficiencies and drive down the unit costs and we're doing that, as Tony talked about extensively in the back office with investing in the platforms and automation in the call center and in the processing platforms. I think you hear a lot about mobile phones and other emerging technologies and I'll let Tony jump in on this, but I think what we've got, we've got this great engine that we can move money instantaneously in multi-currencies.
How we deliver that can change. And we can add things. So I think my view is we look at that as an opportunity to extend what we're already doing. And maybe you can just jump in on that, Tony.
TONY RYAN: Sure. Yes, we view it as an evolution and not a revolution, right? It's going to take some time for those things to evolve. The things that we've tried to focus on are the things that we think are the technologies that are most impactful in the near term. That would be things like e-Money Transfer, online money transfer. I mean that has some real legs. You saw our growth is 140% year-on-year, a very attractive proposition to the consumer and we're very pleased with the results. And for us that was an investment. We have never marketed on the Internet before, we haven't delivered transactions holistically, we've done reporting on the Internet, but we never delivered transactions. So that's a new venture for us.
Directed Sends is on the recipient side, where we're putting money directly into a bank account, that's taking a different form and that's virtual distribution and we think that's another very close to the vest opportunity for us. So once you expand beyond that, our ATM is going to play a role, I think certainly on the recipient side, they are today where their senders are going to go to an ATM machine to initiate a transaction, I think it's maybe a little bit further out. I think mobile phones are popping up in some markets, so I think for us it will be things that we're trying to making continual investments in those technologies to make sure that we have a presence there when the market begins to evolve and we can take advantage of it.
PHIL MILNE: I think you know as we see it in 2010, the vast majority of the business is going to be cash-to-cash. But we're a consumer focused organization so if consumers want delivery through different technology, we'll be there for the consumers.
TONY RYAN: And one other comment too, we've got to keep in mind too there's two sides to this transaction, so technology may be good for either the sender or the receiver, but the other one may be in a situation where they can't take advantage of technology. And as an example, somebody may initiate a transaction on the Internet, but when it goes to be picked up in India, they're out in a rural location and they need to go into that physical distribution network. So, we still see that physical distribution network over the long haul. Even as the cash-to-cash model continues to evolve, to be a real asset when it comes to the fact that it's going to connect in on either the sending side or the receiving side we think, and many times into a less -- the more sophisticated solution will tie into the network, let's put it that way.
PHIL MILNE: Remember, we used to always put that chart up where we built this engine in the middle, lots of ways to get in on the front end on how we're going to get the money. The consumer who's sending can come in on the Internet, they can go into a physical location, maybe it will be a cell phone some day. And then you've got a lot of different ways to deliver it on the back end in multi currencies, it could be in cash, it could be directly to a bank account, you know maybe some day it could be on a phone. But it's really leveraging the infrastructure and the multi-currency money transfer engine that we've built.
JUDSON BROOKS: So as a quick follow-up, in the market or the corridor where the mobile phone, let's use that as an example, is the most used method, are the economics basically the same? Has pricing, because of the reduced barriers to entry or whatever the case that might have changed, driven pricing down in a way that made it less profitable?
TONY RYAN: Well, yes, I think each market is so different and each technology is so different, it's kind of hard to give a really broad answer to that. I think a lot of times what we've seen is as people try to attack things with a different type of mechanism and technology, the cost of entry can be quite high. I think people that have tried to get into this market via ATM machines. There's a lot of companies that have tried and spent a lot of money trying to make that work.
PHIL MILNE: A lot of those guys in the ditches.
TONY RYAN: So I think it's things like that where there's a high cost to entry. Now once the platform is out there and it's adopted, then you start getting scale on top of that and if you have a very efficient transaction in some cases you can do it more cost effectively. Maybe an example even from what we do today, if you take a look at our Form-Free platform, it's much more expensive than our AgentConnect platform. AgentConnect we are tying directly into the systems, we have a dedicated phone line, and for some of our agents and for some of our consumers that's the right mechanism. For others we have a Form-Free solution and we're actually out pushing that in the market, but that has a higher cost structure. Why? Because we actually have the call center operators taking that transaction and performance, the background to that.
So when you take a look at it, in some cases that's the right mechanism to go to market. And you may not have to market it as much beyond that because you actually have a phone in the location, we're providing the customer service and so forth, so there's trade-offs in those economics. So it's very difficult to give a real blanket answer to that. I think what I would say in general though is that, where we believe that we can leverage technology to give a better value to the consumer to keep pushing the equation, that's what we intend to do.
PHIL MILNE: But I think the overriding message is we're building a global brand and that's going to be highly leveragable across a lot of different disciplines, whether we're delivering it via cell phone or it's cash-to-cash, what we're building is very leveragable across the globe.
GREG SMITH, ANALYST, MERRILL LYNCH: Hi, Greg Smith, Merrill Lynch. When you guys talk about your market share at call it 4%, Western Union at 17, it just seems really, really low, you know I always have a hard time wrestling with those numbers. Do you really know where the rest of that market share is? And is it truly addressable? How good is that data actually?
PHIL MILNE: How good is that data. That's a great question. I mean we look at all the studies, iPay does them, you look at the UN does studies on it, the IMF does studies on it. As we piece that all together, and I think the view has been fairly consistent between us and how our major competitor sees it, that those are probably pretty accurate numbers. And the size of the business is what, roughly 300 billion now being transferred around and growing quite rapidly, so I think those are probably pretty good numbers. Where is the rest of it? A lot of it's underground in the Hawalas, you've got the niche players and of course the banks are doing some of it. So once you get past us, our major competitor and some of the bigger niche players, it gets really fragmented from there. I don't know, Tony, do you want to jump in on that one?
TONY RYAN: If you get an opportunity and travel around to some of these markets, you see the number of niche players in different places like the Middle East and everybody knows the situation in Mexico and how many people were transferring money down there. So it's extremely fragmented and if each of those have a half a percent of the market and so forth, it starts adding up. As you go to places like Italy you look at there's Romanian bus companies that are taking money back across the border for recipients, and how do you gather how much money that is that's going across the borders in those informal mechanisms. It's really hard to judge.
But I think the central banks in general are getting better at measuring the remittance flows and I think that data, as it's being accumulated, and if you read anything about the industry you see articles all the time about overseas Filipino workers and money is sent back and so forth. So there are other sources besides iPay and besides IMF that are tracking that and the central banks are getting much better. So we think it's directionally correct and it's in line I think in terms of our market share and what we're seeing. But there are so many different mechanisms for people to move money and I think, as we become more convenient and we get more locations out there and more mechanisms for the consumer, more awareness signs and that type of thing, that we will take more of that informal market and convert it into the formal sector.
PHIL MILNE: I think when you look at it, if we're off a little bit here or there, I mean you're still the number one and number two is less than 25% market share. I mean you just look at that and it's just a massive opportunity.
GREG SMITH: I mean the conclusion is you think that the rest is still addressable? There's not a 30% plug out there that for some reason you can't get that?
PHIL MILNE: No, we really like the opportunity.
GREG SMITH: Okay, great. And then you talked a lot about leveraging these direct connections to billers, are there other ways you can leverage that beyond a product you're already offering today? What else can you do with that? You keep calling it a strategic asset, how else can you monetize that I guess is the question.
PHIL MILNE: Well, I think just broadly I think right now we're very focused on the bill payment side of it for that strategic asset. Beyond that yes there are other ways to leverage it, I don't know how deeply we want to go into that Tony, but I think we're building some very leveragable assets in this organization.
TONY RYAN: Yes, we have that connection made and so you think about walk-in bill payment as an example, and if you have that connection already established on the express payment side there's just a natural feed into those entities. And some of those are going to be financial institutions and so there may be ACH services that we can leverage that technology money, transfer that we can push in there. These are very similar services, what we've not done is really try to get them connected and package them together. I think our technology is evolving to a point of where that's going to be more feasible for us in the future.
Sometimes it's a little bit hard to get beyond some of the opportunities we have because they're very, very big. And when you take a look at the manual transfer opportunity and the bill payment opportunity, it's pretty fertile ground so we haven't really gone a lot beyond that in terms of what else we can do with the billers. I think our focus right now is urgent bill payment, it's the direct biller model where they come in and outsource the telephones, the web-based in IVR piece to us and then it's the walk-in retail model where we can feed those transactions. And that really gives us three mechanisms on the front end to get money to billers and then, when we've got that direct feed in there, that's where we see the consolidation asset.
LARRY BERLIN, ANALYST, FIRST ANALYSIS CORP.: Larry Berlin, First Analysis. Back to the Wal-Mart debt or sort of, when does with them expire? And is there any mechanism for them to change the pricing? Or what I'm more concerned about is bringing it internal given they have a bank in Mexico and a bank in China now and they're trying for a US bank and probably on to other countries?
PHIL MILNE: Well, we actually did disclose in the K this year its 2010 is the expiration of the contract. I think the way you have to look at the money transfer business, and it's a network business and it's a global network business, so I think you have to look beyond just the US and Mexico to answer that question. And the connections that we have across the globe in 170 different countries is really the key to pulling these pieces together to make the system work the way it does. So I guess that's how I'd answer that question with Wal-Mart, it's really the size and scope of the network that's the critical piece. In terms of pricing, we set the price within all of our agents. So that's the way we work on a global basis.
TONY RYAN: And I think the other part of that is Wal-Mart is lined up very well with us philosophically in terms of the way they approach the market and giving that value back to the end consumer. So we've been in alignment on that issue so it hasn't been an issue.
LARRY BERLIN: And then also on competition for a second, the new people coming in, whether it's private equity guys buying and rolling up the small money transfer or Euronet or Coinstar or someone like that, beyond raising the prices to make an acquisition, has that affected the markets at all? Or too early to tell?
PHIL MILNE: I don't think we've seen anything out of those acquisitions that changes the marketplace.
TONY RYAN: No, a way of maybe looking at is we were competing against all of them before they consolidated right, they were all there. They were all doing what they were doing from a pricing and a marketing standpoint, now they're in different hands. You know it provides different challenges, they have to get a return on that investment now as well. So when you take a look at it, I think the number of players that are out there, when we talk a lot about industry consolidation, even if you look at Western Union and Vigo, they're operating those under different brands. That means they're marketing to the consumer in a different way and so forth. So they may be held by somebody else but at the same time we've been competing with them for a number of years.
LARRY BERLIN: And lastly, I realize this is pie in the sky, following up on Judson's question, say instead of going to an agent in the Philippines you guys deliver buy-sell phones through Vodafone or through whatever it is, doesn't that in a sense lower your cost structure or potentially lower it? Because a, you may not actually have to go through Vodafone, you just sort of text message with the approval codes cutting out a middle man or two, but b, Vodafone or somebody like that could ask for a lower commission rate than the cost to support and build the stores and so forth within the country. So in some ways couldn't it be a benefit as we move to the new technology, especially cell phone?
PHIL MILNE: Well, I don't know that we'd be prepared to dive into the economics of a new service like that. I think once again it's just as the technology evolves for delivery mechanisms we're consumer focused and we're going to make available what the consumers are looking for from a cost standpoint. I don't know that we could even begin to address that for what it would cost to deliver through a cell phone. I don't know, Tony, do you -- ?
TONY RYAN: Yes, I would just go back to a general comment. Where we can leverage technology and we've seen it through our Internet service, we've seen it through things like AgentConnect where we have dedicated pipes and so forth, we are using that scale and the technology to try to support our consumer value proposition around the world. And as we analyze things like the mobile phone payments and so forth, that opportunity is there, we would take advantage of it.
TIEN-TSIN HUANG, ANALYST, JP MORGAN: Tien-Tsin Huang, J.P. Morgan, just a follow-on question to that. I guess MasterCard is piloting a money transfer product and naturally I think of that as an additional form of competition there. But is it unreasonable to think about that as a potential partnership down the road between MoneyGram and MasterCard?
PHIL MILNE: Well, I don't think we'd want to comment specifically on any one particular partnership, but once again back to what Tony's talked about on leveraging technology, and I think we've done an effective job across the globe on leveraging various partnerships. So I think we're looking for whatever partners or technology that can add value to what we're trying to get done we'd be interested in. Tony, anything to --?
TONY RYAN: I'd just probably go back to the point again on the retail network. I think the real asset that we have that's unique as you're talking about technology. We have our own technology solutions. But when you think about other possibilities like that, it's really hard to establish this retail network on a worldwide basis and I think that there is many opportunities like that as you look forward to connect what we do today, whether it's our physical distribution network or even some of the virtual things we're working on into other entities. And we would certainly like to do that.
PHIL MILNE: I think there was a lot of skepticism that we could make a big bank partnership work and US Bank has been wildly successful. So I think there's a lot of those types of opportunities out there to leverage our assets the assets of strategic partners.
LIZ GRAUSAM, ANALYST, GOLDMAN SACHS: Hi, Liz Grausam from Goldman Sachs. I'm just wondering if you have a consumer loyalty program in place and how you might be investing in that going forward to better understand consumer level analytics, particularly for the uptick of new services going forward?
PHIL MILNE: Yes, we do and I'll just briefly, and then Tony can dive into it, but we do have a consumer loyalty program, we have a MoneySaver Card and yes we are investing in it. So Tony, do you want to --?
TONY RYAN: Yes, the program, as Phil was saying, is actually called the MoneySaver Card. We really haven't given it a lot of press, but it's out there, it's just in the United States today and it's transactions that are ending in the United States or leaving the United States, it would apply to certain of those transactions. What I can tell is that we've seen very good results in terms of the usage when people have that card. And it also speeds up the transaction because it interacts with our point-of-sale technology as you can swipe that card at locations where we have our DeltaWorks application and other applications and actually populate the data with your last transactions, whether a money transfer transaction or a bill payment transaction. So that helps gathering the information, it helps the agent service the customer and it keeps away from things like misspelling of names and the things that may get in the way of processing a transaction correctly.
So it's very big from that stand, very big from a retention and a usage standpoint. It's one of the big things that we have on the list this year to push and to try to evolve, so you'll see some different things coming out from us in terms of loyalty. I think it's very much like our pricing or our multi-currency and so forth, when we're at the initial stages it's going to take some time to roll that out and to get to key markets. But it is something that we're focused and we've seen good results out of our current program to date, we just haven't given it a lot of air time.
LIZ GRAUSAM: And in terms of your C-to-B growth, it seems like it's been fairly concentrated in the US to date, do you have expectations to broaden that out internationally from a bill payment standpoint or other additional services?
PHIL MILNE: Well, I think that down the road we see opportunities overseas for the C-to-B business certainly. But yes our efforts have been real concentrated just with the size of the opportunity here in the States.
LIZ GRAUSAM: And just lastly on the directed send, you indicated that it took a few days actually for those transfers to occur as a settlement due to banking regulations. Can you just kind of expand on that a little bit more in terms of card technologies or ACH-based technologies, why it may take relative to 10 minutes for a cash transfer to settle?
PHIL MILNE: That's where we are in that publicly traded company because of --.
LIZ GRAUSAM: How that may contract over time or what measures you can take, particularly with your ACH technology to bring that time down?
PHIL MILNE: Yes, I think in general, and it's why I think that our cash-to-cash business is so big because we can do it in 10 minutes or less. In order to move money through the banking system to an individual account across the globe can take two to three days and sometimes longer. So I think that is one of the reasons that the consumer money transfer business is the size it is and has the opportunity that it has ahead of it. And so yes we think that's going to be an important part of the service offering for those who don't want to go to a physical location, but it's never going to have the immediacy of a cash-to-cash transaction. I don't know, Tony, do you want to --?
TONY RYAN: Yes, I think if you look at mechanisms, the comparable to ACH in the State would be the Swift Network [right] internationally. And a lot of that is going to be dependent on the banks that are tying into Swift and how quickly they're going to post the transaction as well. ACH is inside the US, you've got immediate funds with a wire but it takes an extra day with an ACH and then you get return windows on top of that. So all those things kind of get involved in terms of when funds are available to the end consumer.
So as we approach things and we get transactions going through Swift and other mechanisms, there will be delays and the reason we've given a range is it's going to depend on the country. In some cases the money is going to get there sooner and in other cases it's going to take a little bit longer. But we'll be evaluating that in terms of our pricing model and how we market and so forth. But we think for a range of consumers, that's going to be the most convenient option. And if you think about, if you don't have to travel into a city and go to a physical location, it may be worth that extra three days in order to have that money delivered to your bank account. I think it's all about choice for the consumer.
PHIL MILNE: Choice and convenience.
UNIDENTIFIED COMPANY REPRESENTATIVE: Just a point of clarification. Ten minutes is, we make sure that we have payout agents that have liquidity to pay out, we're not settling with our agents in 10 minutes. It's very different. We're working through the banking system, which internationally is very slow and complex.
GREG SMITH: Greg Smith again from Merrill Lynch, can you just talk about the domestic consumer-to-consumer money transfer business? How big is that of your overall money transfer? And what are some of the trends there? It seems like a business that may kind of fade over time, but is that a correct assumption?
PHIL MILNE: Well, it's big and it's been growing fast.
TONY RYAN: What I would is that the US-to-US transactions, there are still a fair number of those transactions that are actually immigrants sending money to other family members, right? They may migrate to the United States. And if you really look at our consumer and study them, there's a lot of chain migration going on. And what we mean by that is people leave their country, they'll go to a city. They may stay with a family member, a brother or sister that's come to the country or a friend. And then they move on to another city and maybe they have some differently and they need some help or their brother and sister needs some help. And so there's a lot of transactions inside the United States or inside any country where there are actually transactions that immigrants are making. So I think the demographics and population trend as immigration continues bodes well in terms of intracountry services, whether it's in the United States or anywhere else.
Having said that, I think that even the customers that are here that were born in the United States are using that service. As we've continued to expand our network and our reach we've continued to take share and we do report domestic along with express payment and everything bundled together, so you can get at least a directional sense of our results versus other people that have a domestic service and how we performed against that. And so for us, we see it as a growth opportunity.
GREG SMITH: What are some of the other countries where you're doing the intracountry transfers then today?
TONY RYAN: Well, there's a lot of countries where we do that, there are some places where you need a specific license and I think the ones that tend to get talked about are the ones where you need to get more regulatory approval. For us that hasn't been a primary focus today, but if you look at like the United Kingdom as an example where we have the post office locations, a lot of transactions start and end in the United Kingdom. So there are other countries like that in the major send markets where we'd have intracountry service. Part of the issue you have though too is that a lot of our agents in what we would typically call receive markets, they have their own send service and you have to make a choice about whether or not you want to compete with that agent base as well in that intracountry market. So I think that those are some of the things that we need to evaluate as we're moving into the marketplace.
GREG SMITH: Just the Philippines specifically, are you doing the intracountry transfers?
TONY RYAN: On a very limited basis, yes.
PHIL MILNE: The vast majority of our domestic-to-domestic type transactions are done right here.
CRAIG PECKHAM: It's Craig Peckham at Jefferies, so to double the agent base over the next several years, how much of that is going to depend upon opening more retail locations?
PHIL MILNE: Oh, you know the retail is a very small part of the strategy, Craig, and very specific to a few places that, due to regulatory issues, we have to do that. So that's going to be a very small piece of it, very small.
CRAIG PECKHAM: And if you look at your market share within specific countries, of course data is very hard to get at, but where do you think you have the greatest upside from a market share standpoint?
TONY RYAN: We always have trouble with that question because there are so many opportunities. I mean the growth is coming out of so many markets and it's going to so many markets, and I think that's one of the really attractive things. It's hard to boil it down. In our 10-K we did state what our top countries were so it gives you an idea of where our top send markets are, but there are so many places where the money ends up because immigration is truly global at this point. So one of the most difficult questions to answer is where are you focused, and literally it's everywhere. That's why we are setting up regional offices in India and in different places in Africa and so forth is to get closer to the agent base and the customer because there's so much opportunity out there.
PHIL MILNE: And I think as we set up the receive market and some of these emerging opportunities, it gives light to some of your current send markets like the States and Western Europe and the Middle East. So it's a tough question to specifically pinpoint. So as we build out India and China you're going to see benefits back in the US, Western Europe and the Middle East where we're already getting tremendous growth.
DAVID SHIPLEY, ANALYST, ARBOR CAPITAL: [David Shipley] at Arbor Capital, first of all congratulations on the Giant Eagle announcement.
PHIL MILNE: Thank you.
DAVID SHIPLEY: And I was hoping you could elaborate a little bit on the that as it relates to your competitor and how you differentiate yourself and what they saw that they liked versus Western Union?
PHIL MILNE: You know I think in general, and I'll let Tony throw in anything he wants on this. I think we have in general lined up with people who were concerned with the consumer value proposition. I'd say first and foremost to the fact that we do a lot of co-branding and really push their locations and our advertising and tagging billboards with their logos, and I think from a technology standpoint, on how we integrate into the stores. So, I think those would be the top three why I think somebody goes our way. Anything to add specifically, Tony?
TONY RYAN: Yes, just one thing, it's all those things. And I think the other thing on top of it was the customer care. Giant Eagle came out and looked at how we handle the consumer in out call center in that environment, and that's been a real asset for us. Our team out there just does an absolutely phenomenal and are really part of our sales process in terms of how we handle that end consumer.
And I think probable the one other thing that I would add too is that they took a look at our trend line, Giant Eagle, Supervalu, same case. They see the growth. They see the market penetration that we're getting, and when you take a look at the long-term view and the decision you're going to make, that growth is very, very attractive, and we have gained traction in the last couple of years.
UNIDENTIFIED AUDIENCE MEMBER: And could you elaborate on the global opportunity then for new organic partnerships with retailers that don't have a relationship with anyone and then for additional competitive wins?
TONY RYAN: Yes. I think our network expansion really is -- it's both looking for selectively, people that are currently selling the service and in the market. But, we're also pursuing non-sellers. And I think are both are attractive for different reasons. And you get immediate volume with the people that are in the market today. But, they already have established commission pricing and so forth that may be a little bit more expensive than the non-sellers.
So, I think if you look at it, we really see it as being a combination of both new relationships that are selling and their competitive take-away as non-sellers. And I think the other thing that we have too that we've been able to expand is, we're not in all the locations today in some of our current relationships. And I think what you'll see too is some further expansion opportunities from our -- some of our current footprint where we're just not fully penetrated in those relationships today.
UNIDENTIFIED COMPANY REPRESENTATIVE: But, I think the other key part of that is, there are lots of opportunities where they're just non-sellers and where you don't have to go displace somebody. And that's what when you look at the size of the runway, that's one of the things that we see as a big opportunity. Here in the States, there is just a lot of locations of big chains that just aren't selling anybody.
UNIDENTIFIED AUDIENCE MEMBER: Thanks.
UNIDENTIFIED COMPANY REPRESENTATIVE: And the trend is around the globe.
PAUL BARTOLAI: Paul Bartolai from Credit Suisse, just a couple of quick follow-ups. Phil, you mentioned the growth in Mexico reverting back to becoming more in line with the Banco de Mexico data. I'm -- just want to make sure I understand why that's going to revert back to that growth rate and why it's going to slow back to that level.
PHIL MILNE: Well, I just think it's what's going on in the marketplace right now. And I think we kind of outlined some of the thoughts we had on that one -- the -- I think the construction economy here in the States, and anecdotal discussions we've had with agents, that consumers maybe went back a little earlier. Back home for the holidays than they usually do and are coming back a little bit later than they have in the past. I think too, some of the things talk Tony outlined on immigration and probably a little bit stronger economy down in Mexico. And I think it's really a combination of those things.
PAUL BARTOLAI: Right. But, those seem to be macro factors that would impact the overall data. I'm not sure I understand why your growth relative to the industry growth is going to converge.
PHIL MILNE: Well, I think last year, we had a lot of huge network gains. And we had also just done a lot of the simplified pricing. So, I think a lot of that was -- it was a factor in '06. And Tony, anything to --?
TONY RYAN: Yes. And Wal-Mart, we're coming out with some really big growth numbers there too. And obviously, you could go back and look at our growth rates in the first quarter. And we outpaced the market by quite a bit, and the first quarter was our highest growth rate to Mexico. So, it's going to be our toughest comparable. But, I think when you look at the Wal-Mart growth slowing a bit, the competitive take-away is that we're not starting to lap. Those are going to be the primary thing.
And it's true with the rest of our network too. We've said that network is going to be a bit choppy. It comes on in chunks. And so, there's going to be different opportunities where our growth may accelerate for a time and then -- and decelerate for a time in any particular quarter as a result of bringing on that network.
PAUL BARTOLAI: Great. And then the second question, you've talked about this implied pricing and that its' beginning to anniversary. So, as that occurs, should we start to see fee commission expense grow more in line with transaction growth in '07?
PHIL MILNE: Well, I think we saw that over the last two quarters, third and fourth quarter, and fourth quarter especially. And I believe we said that trend would stay in that similar range.
TONY RYAN: Yes. I think the fourth quarter, they were only about two percentage points apart if you look at our volume growth rate and our revenue growth rate in money transfers. So, I think -- we had the anniversary of the vast majority of what we did with a simplified pricing approach by the fourth quarter of last year.
PAUL BARTOLAI: Thanks.
MARK SPROULE: It's Mark Sproule, Thomas Weisel again. When you talk about a -- expanding into some of your sort of add-on features, Bill Payment acceleration, et cetera, how do you look at that as far as some of your agent locations, ACE Cash Express as an example? Does this put in sort of competition with some of your agent partners? And then, some of your other features like prepaid cards, et cetera are obviously big focal areas for a low-end financial service companies. How do you balance out that, providing those additional services through your agent locations, but not butting heads too much with you guys?
PHIL MILNE: Well, I think inherently across the globe, you do run into channel conflict with some of your customers. And Tony talked about one example where we were discussing -- whether we're doing intracountry wire transfers, is there some channel conflict with some of your bigger agents. And I think obviously we look at that and on a constant basis, and we look at that in terms of what our agents are doing. But, I think some of those things are just inherent in business. And we've got to navigate around those, but we think those are important opportunities for us. And yes, are we going to bump heads with some of our customers on some of those things? Yes.
MARK SPROULE: And then I guess with --?
PHIL MILNE: I don't know, Tony, anything to --?
TONY RYAN: I think you've summarized it. It's the nature of business today. I think that we look at it and say where we have opportunities to join forces. There's opportunities, and there may be places we're competing. I think that's just the way of the world and I don't see that as necessarily a downside to things. In some ways, you may even cooperate on some of the things that you're actually competing on.
PHIL MILNE: And be able to leverage it.
TONY RYAN: Yes, absolutely. So, we're look at that on a relationship-by-relationship basis.
MARK SPROULE: And then, with the prepaid card rule, do you guys look at --. I guess on a couple of questions. One, a lot of people are trying to enter that market, sort of the ATM-to-ATM transactions that we always hear about but never really see a lot of volume benefit for. But do you see that as an opportunity, given your agent base, to drive that penetration of that low-end account, transferring those people to use the prepaid cards as maybe de facto sort of DDA services and you could get extension benefits of transactions and sort of almost interchange benefits as you go forward?
And then, how do you compete with initiatives like the rePower from MasterCard, et cetera, that are trying to effectively drive consumers to the card-to-card networks? And how do you see those type of penetrations? And then lastly I guess with your initiative on the prepaid side, how has that helped from maybe a loyalty perspective? I know we talked -- you talked a little bit about your own loyalty card, but kind of increasing retention in transactions from those consumers?
UNIDENTIFIED COMPANY REPRESENTATIVE: Right. Well again, we're on the initial stages. And I think if you look at our approach to the card market today, it really starts with a general spend, prepaid debit card inside the US. I think the natural evolution would be the tie-in to other card applications. There could be Money Transfer application on that, in which we would be competing with the other firms that you outlined. And then, there would the potential tie-in to our loyalty program and the money-saver cards. So, I think anywhere you're using plastic or you're using and account number, there'll be some convergence in what you can do that in terms of loyalty, Money Transfer and the like.
So, the thing we're trying to do with cards is the same thing we're trying to do with Bill Payment, is the same thing we're trying to do with eMoney Transfer, same thing we're trying to do with directed sends. Its start the process now in terms of the