Western Union (WU) reported Tuesday (Aug. 4) that while second-quarter revenues fell for much of its business, WesternUnion.com’s average monthly active customers shot up 45 percent year over year.
Chief Financial Officer Raj Agrawal told PYMNTS that Q2’s digital growth was “unbelievable.”
Agrawal said the company’s digital operations have grown not just in terms of dollar amounts, but also in terms of how many new customers the pandemic has brought in. He added that many new clients seem likely to stick around.
“The great thing about us is that 80 percent of these new customers visiting WU.com are also wholly new to Western Union,” he said. “This is not a shift because this digital growth isn’t coming at the expense of our retail business so much as it is about getting new customers to the category and other customers from other parts of the remittance market, like banks and other digital financial services providers.”
The firm also said that WesternUnion.com was the most downloaded mobile app among peer money transfer companies during the quarter, according to mobile app marketing firm Sensor. Management added that WesternUnion.com is currently available in more than 75 countries, with bank account payout in over 100 nations.
CEO Hikmet Ersek said in a statement releasing the results that “despite the challenging global environment, we continued to execute on our strategic objectives that position the company for future growth and prudently managed our business to deliver solid profit performance for the second quarter.”
Ersek went on to particularly praise WU’s continued significant investments in building out its digital cross-border/cross-currency platform in recent years. That paid off during Q2 as the consumers and businesses all over the world pivoted to a digital-first mindset.
WU reported that digital money transfer revenue grew 48 percent year on year and 50 percent on a constant currency basis to a record high of $219 million for Q2.
Those gains helped offset pullbacks that the company saw in its traditional business lines. For example, consumer-to-consumer (C2C) revenues — which represented 88 percent of total company revenue in the quarter — declined 12 percent, while overall transactions dropped 8 percent. Business Solutions revenues likewise fell 17 percent due to softening trends in verticals more exposed to the pandemic, like education, travel and tourism.
All told, WU’s overall revenue dropped 17 percent year over year to $1.1 billion. Earnings likewise fell sharply to $161.9 million (39 cents per share) from $614.8 million ($1.43 per share) a year ago. Still, WU beat analyst estimates of 35 cents per share in earnings.
Agrawal told PYMNTS that WU also saw its brick-and-mortar retail business begin to sharply recover in June and July as offices reopen worldwide. He also said that doesn’t seem to be coming at the expense so far of WU’s digital business.
“As we've talked to our customers on the digital side, most of them do plan on staying with us after the crisis is over,” Agrawal said. “New needs have arisen in various markets around the world. So, it really is a win-win situation for us in terms of the trends that we see.
He added that the new digital consumers also tend to be higher income and send larger sums of money via the service.
Agrawal said WU also saw an increase in funds flowing into areas where money was already flowing fairly regularly in the pre-pandemic world — Latin America, Southeast Asia and India in particular. The outflow of funds from the United States has also ticked up.
“The key sending markets like Europe and the United States — those customers, many of them have had the ability to keep sending,” Agrawal said. “That certainly has helped out.”
As for what comes next, Agrawal said that’s difficult to predict in part because the answer will likely be different depending on where in the world you are.
He said some nations have better social safety nets or managed the virus better in the early phases than others did. That means different nations are in different points of the recovery cycle.
But Agrawal said that WU’s overall outlook on an increasingly digital future is positive.
“I would say that we're in a very good position,” he said. “We’re rebounding in our retail business faster than we had expected, and we are seeing our tremendous investment in digital over the last several years result in tremendous growth in the face of this pandemic.”