Think of Western Union, and its yellow placard advertising an agent location comes to mind. It's a physical branding and marketing component that few money-transfer providers can match — but one that's of diminishing value in a digital world.
In the past several years, the Englewood, Colo.-based company has made a point to develop and emphasize mobile technology. It has to, considering the increasingly competitive field of domestic mobile P2P services and other global wire transfer alternatives surfacing.
"Many people think of Western Union as mainly a cash retail business, but the reality is that we're profoundly digital," said Khalid Fellahi, senior vice president and general manager of Western Union Digital. "Over the past decade we've been undergoing a dramatic technology transformation, driving a multilayer digital strategy and transforming our network into a true platform."
Going into this year, Western Union saw a
Western Union is "doing everything they can to become something different, as they are recognizing that they have a true asset in their physical locations that essentially can't be replicated by anyone else," said Thad Peterson, senior analyst with Boston-based Aite Group.
While a significant percentage of the developing world still relies on a Western Union office to do remittances and disbursements, it is also important to note that many of those consumers never went to desktops or laptop computers to get online, Peterson added. "They went straight to their phones, and Western Union's strategy to go digital makes a lot of sense based on that. They are positioning it as a mobile-first model."
Numbers coming from Western Union's latest earnings reports support that shift. The company's digital business has grown in double digits for many quarters, Fellahi said. "Now, 70 percent of our digital transactions originate on mobile devices, but the bigger point is that Western Union is uniquely able to connect the digital and physical worlds of money," he added.
That type of connection is working to the tune of its cross-border platform processing $300 billion across 130 currencies.
As much as any other factor for digital advancement, Western Union is leveraging its platform to address needs of customers in specific markets, or to solve complex aspects of international money movement.
This month, Western Union and
"Increasingly, we’re opening our platform — meaning our APIs, technology stack, FX and settlement engine, compliance infrastructure, retail network and ability to send funds to billions of accounts and mobile wallets — to third-party providers," Fellahi said. "Our collaborations with Amazon and Safaricom are two recent examples of that."
It can all serve as a bounce-back for Western Union after enduring fraud attacks and a
Western Union is positioned to move in other directions with mobile services. The company isn't playing its hand in that regard, with Fellahi saying only, "Stay tuned … we work hard to avoid blind spots and we're proving that startups certainly don't have the monopoly on innovation."
Even with advancements in mobile and a hint of expanding into other services or technologies, Western Union hasn't hopped on the blockchain or bitcoin bandwagons just yet.
The company continues to conduct transaction
"It’s still early days and things are evolving," Fellahi said of any blockchain advancements with Ripple. "We’re very open to the future potential and we’re testing blockchain-related technologies on several fronts, including transaction processing, settlement, working capital optimization, regtech and digital identity."
Still, Fellahi acknowledges the company could have a different look in the future.
"You'll see us continue to leverage our platform in ways that might surprise longtime observers of this iconic company," he said. "We're showing up differently in the market."
