Western Union’s first quarter results, released Tuesday (May 1), benefited from growth in digital C2C transactions as executives expressed confidence that they could fend off Walmart’s recent entry into the global money transfer space.
Consumer-to-consumer revenue that stemmed from WesternUnion.com increased 23 percent in the first quarter of 2018, with transactions growing 24 percent.
Western Union’s electronic bill payment business booked 4 percent growth, driven in large part by the Pago Facil Argentina walk-in and the Speedpay U.S. businesses.
Those online clients are also “loyal” customers, said Hikmet Ersek, Western Union’s president and CEO, during the post-earnings conference call, though the company offered no figures to back that up.
During the call, though, analysts seemed as interested in those figures as the competitive challenge from the Walmart2World global money transfer service that the retail chain launched earlier this spring in partnership with MoneyGram International.
Walmart had already operated a domestic money transfer program.
Ersek played down the new Walmart threat.
A big reason is the differences in scope between the two companies, he said, with Western Union having more than 550,000 agent locations around the world, compared with the nearly 12,000 Walmart locations globally, including about 5,300 stores of all types in the United States.
Nor does Ersek foresee a pricing war as the result of Walmart’s new money transfer product. “The environment is stable, and I don’t expect big pricing changes,” he said during the call. “There is not a lot of pricing pressure right now.”
For the first quarter, Western Union reported a 7 percent year-over-year increase, to $1.4 billion, generally meeting analyst expectations. Most of the growth came from the consumer money transfer business. Total consumer-to-consumer revenue grew 7 percent and transactions grew 4 percent year over year, with Latin America, North America and Europe helping to fuel the increases.
Net income increased 32 percent year over year, to $213.6 million. Earnings per share stood at 46 cents, beating analyst expectations of 42 cents.