Revenue from electronic channels supported by The Western Union Co., including westernunion.com, account-based funds transfers and mobile funds transfers, grew by more than 35% during the second quarter, the company said in announcing its earnings for the period.
Electronic channels now represent 3% of total revenue for the funds-transfer company, Western Union noted in its earnings release, which did not provide a specific revenue amount for the channels.
“We are gaining new customer segments with the electronic channels, and with our [business-to-business] activities, which now are combining business [services] with Travelex, we really are entering the new customer segment,” Hikmet Ersek, company president and CEO, told analysts during a July 26 conference call. “I believe there will be a growth tear also, so I am very excited about the future.”
Englewood, Colo.-based Western Union announced its plans to acquire Travelex Holdings Ltd. earlier this month for £606 million (US$975 million or 673 million euros) to help the company expand beyond its core consumer-remittance services (
The company’s electronic account-based funds transfers, which include cash-to-account and account-to-cash through banks, increased approximately 40% in the quarter, Ersek said. “We now have over 60 banks signed to offer account-based money-transfer services, with 30 active,” he said. “In Italy our ATM-based service, Banca Intesa Sanpaolo, is now being activated.”
The bank’s customers will be able to send electronically funds transfers from their accounts using ATMs, Ersek said. “And we expect to roll out to 7,000 Intesa Sanpaolo Palo ATMs in the third quarter,” he said.
Also this month, Chinese B2B e-commerce specialist Alibaba Group Ltd. said it is working with Western Union to develop an online payment platform (
“Now, buyers of goods on the AliExpress.com e-commerce platform have the option of paying cash at Western Union agent locations in more than 160 countries and territories,” Ersek said during the call.
Regions Bank in Birmingham, Ala., in June announced plans to offer Western Union's funds-transfer services at all of its roughly 1,700 branches (
At Western Union, prepaid cards in force totaled 1.1 million at the end of June, with retail distribution available at more than 12,000 U.S. locations, the company said in its earnings release.
Consumer-to-consumer transaction volume grew 6% during the quarter, to 56.3 million from 53.1 million a year earlier. Revenue for the segment was $1.16 billion, up 8.4% from $1.07 billion. Transaction-fee revenue totaled $898 million, up 6.5% from $843 million, while foreign-exchange revenue was up 11.5%, to $245.4 million from $220 million. Other segment revenues totaled $11.7 million, up 15.8% from $10.1 million.
Global business payments transaction volume grew 7.8%, to 105.6 million from 98 million. Total revenue for the segment was $186.7 million, up 4.1% from $179.3 million. Transaction fee revenue was up 2%, to $145.3 from $142.4 million, while foreign-exchange fee revenue totaled $33.8 million, up 15.4% from $29.3 million. Other revenue in the segment remained flat at $7.6 million.
As a company, Western Union reported net income for the quarter of $263.2 million, up 19.1% from $221 million a year earlier. Revenue totaled $1.37 billion, up 7.9% from $1.27 billion.
Shares of company stock were selling for $20.29 in late morning trading July 26, up 5.5% from the previous day’s closing price.
