In one fell swoop, Western Union may become the biggest neobank of all — and its reach already touches roughly 150 million customers across 200 countries.
Europe may be ground zero for the company’s digital banking push.
As reported Tuesday, the money transfer juggernaut is teaming up with Marqeta, the card-issuing platform that is integrating its offerings into Western Union’s digital banking platform. The partnership enables Western Union to issue virtual and physical Visa cards to be used in remittances.
In terms of mechanics, the announcement brings together Marqeta’s open application programming interface (API) card issuing platform while enabling Western Union to handle the workflow with real-time insights into card activity.
Notably, the release detailing the joint efforts between the two firms notes that Marqeta’s platform gives Western Union the ability to add new features as time goes on.
And thus, it is the platform model that offers some extensibility and gives Western Union some dry powder in its bid to cement consumer loyalty for a range of banking services.
Why Europe? Not surprisingly it’s an important market for Western Union, accounting for 29% of consumer-to-consumer revenues, as detailed in earnings supplementals from the latest quarterly report. Management stated on earnings calls late last year that there are plans to pilot — through Western Union International Bank — WU-branded solution in a few European countries.
That offering would function as a multicurrency bank account, debit card and integrated money transfer solution. And in commentary on the broader picture, then-CEO Hikmet Ersek stated that “we are a trusted provider to a large, unique customer segment, the global migrant community, which has many needs beyond money transfer, such as insurance, lending and travel.”
Going Digital, Globally
We note that the growing connectivity in Europe, and indeed, across the globe, underpins the opportunity for Western Union (and other firms) to bring a broad range of banking services, done digitally, to a broad range of consumers. For just a few anecdotal examples, consider the recent findings of “Benchmarking the World’s Digital Transformation,” a PYMNTS and Stripe collaboration.
Surveys of 11 nations found that countries including Germany and France are reaching only about 25% of their “full” digital potential, and yet connectivity, depending on where you look, is high. Anywhere from 80% to more than 90% of the adult population in those nations is connected to the Internet, and roughly commensurate shares own smartphones.
Having the hardware and software in hand, literally, means that consumers across the continent would be able to embrace digital banking more fully, as cards are connected to digital payments. And that means Western Union, with roots in the 19th century, becomes a 21st-century banking giant.