Growth in the money transfer business tends to correlate to immigration and related employment rates worldwide. Therefore, an indicator for future growth is the size of the international migrant population, which to a certain extent follows economic opportunity worldwide. In 2006, the United Nations reported that there were 191 million people living outside their country of origin in 2005.

Aite, an independent research and advisory firm, estimated in a January 2005 report that the total value of remittances sent by workers to developed and emerging regions would be $249 billion in 2005 and that this amount would grow annually at a rate of 8% through 2007. These figures were estimated primarily by using balance of payments data reported by the International Monetary Fund, the Inter-American Development Bank, central banks and money transmitters. They do not capture money transfers sent through informal channels and do not measure the size of the intra-country market. The World Bank estimates that unrecorded remittances are at least half as large as recorded remittances.

Another significant trend impacting the money transfer industry is the increase in regulation in recent years. Regulation in the United States and elsewhere focuses, in part, on anti-money laundering and anti-terrorist financing compliance efforts. Regulations require money transfer providers, banks and other financial institutions, to develop systems to monitor and report appropriately on certain transactions.

The consumer-to-business payment industry has evolved with technological innovations that created new methods of processing payments from individuals to businesses. In a February 2005 report, Aite estimated that more than 18 billion bill payments would be made in 2005 in the United States alone. The consumer-to-business payment industry outside the United States is at varying stages of development. In some countries, walk-in cash payments at a biller’s office or through a third party network are widely used, while in other countries electronic payment options are finding ready acceptance by consumers and businesses alike.

Individual money transfers from one consumer to another are the core of the Company’s business. The Company maintains three separate multi-currency, real-time money transfer processing systems through which a consumer can transfer money from a location within that system.

The Company offers money transfer services worldwide. Walk-in money transfer service is available at each of the Company’s sending agent locations around the world. In the United States, consumers can use a debit card to send transactions from many agent locations. In some United States outbound corridors and in select international corridors, the Company provides Direct to Bank service, enabling a consumer to send a transaction from an agent location directly to a bank account in another country. The Company’s “Next Day Delivery” option is a money transfer that is available for payment 24 hours after it is sent. This option is available in certain markets for domestic service within the United States, and in select United States outbound and international corridors, including Mexico.

The Company’s consumer-to-business services strive to give consumers choices as to the payment type and method of payment. Consumers and billers use the Company’s Speedpay service in the United States and the United Kingdom to make consumer payments to a variety of billers using credit cards and debit cards and ACH. Consumers use the Company’s Quick Collect service to send guaranteed funds to businesses and government agencies from over 50,000 agent locations across the United States and Canada, using cash and, in select locations, a debit card. The Company also offers Quick Cash, a cash disbursement service used by businesses and government agencies to send money to employees or individuals with whom they have accounts or other business relationships.

Cost of services was $1.2 billion for the six months ended June 30, 2006 and $995.3 million for the six months ended June 30, 2005, an increase of 16%.

Total expences were $1.5 billion for the six months ended June 30, 2006 and $1.3 billion for the six months ended June 30, 2005, an increase of 18%.

Operating income was $639.1 million for the six months ended June 30, 2006 and $612.6 million for the six months ended June 30, 2005, an increase of 4%.

Net income was $438.7 million for the six months ended June 30, 2006 and $451.6 million for the six months ended June 30, 2005, a decrease of 3%.