MoneyGram cyberattack leads to days-long outage, unprocessed payments

MoneyGram, a global financial payment services firm, announced on Tuesday that it is making some progress in restoring operations after a full-blown cyberattack incapacitated its networks over the weekend.

The peer-to-peer (P2P) payments giant had announced it was “experiencing a network outage impacting connectivity to a number of our systems,” on its social media on Friday, September 21st.

On Monday, with its website still down for both personal and business customers, MoneyGram admitted to identifying “a cybersecurity issue affecting certain of its systems.”

In a third update posted on X Tuesday, the company announced it had made progress “in successfully restoring some of our key transactional systems.”

“Once all systems are fully operational, transactions that are currently pending will be made available to customers. We apologize for any inconvenience and will continue to share relevant updates as available,” MoneyGram posted.

We continue to make progress in successfully restoring some of our key transactional systems. Our dedicated team is actively working around the clock on resuming normal business operations. Once all systems are fully operational, transactions that are currently pending will be…

undefined MoneyGram (@MoneyGram) September 24, 2024

Founded in 1998 and headquartered in Dallas Texas, MoneyGram is among the top providers of global P2P payments services and money transfers, providing both in-person and digital services to millions of customers each year.

The company said it had been actively working around the clock to bring systems back online and resume normal business operations.

"Major breaches like this one can have a devastating impact on organizations and their users," said Renuka Nadkarni, Chief Product Officer at Aryaka, a cloud-based network and security solutions firm using SASE (Secure Access Service Edge) architecture.

“In this case, MoneyGram, the world's second-largest money transfer company, processes over 120 million transactions annually from tens of millions of users," Nadkarni said.

As soon as the intrusion was detected, MoneyGram said IT teams had proactively taken systems offline, impacting network connectivity.

But with millions of users and transactions at stake, Nadkarni says, “even a few days of downtime can have severe implications, such as financial losses and harm to customer trust and brand reputation.”

Limited information about compromised data

Nick Tausek, Lead Security Automation Architect at Swimlane points out that "financial services organizations are prime targets for cybercriminals, due to the large amounts of money and sensitive data they hold."

The MoneyGram breach is “a stark reminder that these types of organizations often face a dilemma between meeting customer and market demands and prioritizing security,” Tausek explained.

“These challenges are exacerbated by the increasing complexity of financial services operations, driven by the rapid pace of digital transformation,” he said.

According to Swimlane research, 42% of financial organizations have experienced at least one breach with a total cost of $1 million or more.

As of Tuesday, MoneyGram has provided limited information about which systems may have been breached, what customer data may have been compromised, and if any funds were stolen in the hack. Cybernews has reached out to MoneyGram's corporate offices, but did not hear back by the time of this report.

MoneyGram said it has launched an investigation, coordinating with authorities and engaging with leading external cybersecurity experts, and that it recognizes "the importance and urgency of this matter to our customers and partners."

According to data compiled from Lead IQ, MoneyGram operates in more than 200 countries and territories, with a global network of about 347,000 agent offices.

Financial services include money transfers, money orders, official bank checks, bill payment services, and, more recently, a partnership with Coinme to provide cryptocurrency cash services.

The company has roughly 2300 employees and boasts an annual revenue of about $1.3 million according to MoneyGram’s 2022 year end report.

MoneyGram was acquired by the private equity firm Madison Dearborn Partners last June.

To ensure customers are protected, “financial service providers must prioritize a proactive approach to their security measures,” Tausek said.

“Technological innovation and speed are essential in this industry, but they are meaningless without a strong security foundation,” he added.