Western Union’s 500,000th Agent Location Means More Than That

In opening its 500,000th agent location at a Freedom News store in New York City this week, Western Union further extended its lead over competitors in terms of the size of its physical money transfer network.

But the company is hardly done expanding. “We still don’t believe that’s anywhere near enough,” Executive Vice President Diane Scott says.

A growing network of physical locations continues to be of the utmost importance in the money transfer space — even as electronic innovations push more and more payment activity to the digital world. That’s because cash — those old, dirty, folded-up-in-your-pocket pieces of cotton paper — continues to be the world’s favorite means of peer-to-peer money transfer. A study Scott cites estimates that 90 percent of payment interoperation between peers across the globe is conducted in cash.

Scott also points out that the digital revolution is affecting one side of the money transfer market more than the other. With direct deposit, mobile banking and electronic transfers, money senders are getting a lot out of new digital payment features. But, especially in developing markets, consumers still prefer receiving money in cash.

That’s not to say the use of digital payments isn’t growing on both sides of the money transfer platform. And Western Union’s electronic channels are growing too — revenues from electronic segments like westernunion.com are up 38 percent over the year, according to the company’s latest earnings call.

Where Western Union hopes to be positioned is squarely in the middle of the show. “We really look at it as ubiquity,” Scott explains, citing “the ability to connect all of it.”

Opening a 500,000th agent location helps Western Union extend its reach. The diversity of its transfer agents helps, too; in the U.S., for example, convenience stores are the place to be, while in Italy, tobacco store owners are often great agent partners, Scott says. It’s a global reach, too, with agents situated in 200 countries, transferring funds in 120 currencies.

As to what the company’s future growth plans look like, comments from Western Union President and CEO Hikmet Ersek, delivered at this week’s main event, are telling.

“Our vision is to establish one million Western Union touch points – in every corner of the globe where anyone, anywhere can send a money transfer, pay bills, obtain and reload a prepaid card or pick up funds sent through a Western Union yellow phone or the Internet. We believe access to financial services is not a luxury, it’s a necessity,” Ersek said.