Western Union Sees Consumer Transaction Boost In Q2

Western Union beat earnings expectations when it posted better than expected second quarter results yesterday (July 30).

Revenue for the quarter hit $1.4 billion, a 2 percent decrease from 2014’s Q2, and net income hit $189.3 million, a 2 percent decrease from the year prior. Overall on the consumer segment, transactions were up 3 percent in the quarter and revenue in the consumer-to- business segment was a revenue increase of 8 percent. C2C revenue increased 22 percent and electronic channels revenue (, account-based money transfers through banks and mobile money transfers) increased 19 percent in the quarter.

“We posted another quarter of solid results, with improved constant currency revenue trends across all our business segments, despite some geopolitical and global economic challenges,” Western Union CEO Hikmet Ersek said in a prepared earnings release. “ growth also accelerated in the quarter. Our global digital presence is expanding quickly, as we continue to advance our omnichannel strategy for cross-border money movement.”

During the earnings call with analysts, Ersek went into further details about consumer money transfers and mobile use among its customer base. He noted that digital-initiated transactions are expected to be fast growing over the next several years. Western Union now has 29 markets to send money around the world.

“In the quarter, consumer money transfer was led by a healthy U.S. outbound business and good transactions growth in markets such as Germany and U.K., which offset continued challenges in Russia and some African countries. again delivered strong growth in the quarter not only in the U.S., but across most of the countries where we have transaction sites,” he said.

“Customers using online or mobile to send money to bank accounts are providing incremental business. Improvements in mobile access such as with our new U.K. app are also producing results. Our consumer money transfer pricing has been stable as the net pricing investment for both the second quarter and the first half of the year was minimal,” Ersek continued.

Speaking toward the cross-border money segment, Ersek acknowledged that each individual market poses its own set of challenges and said that in many regions, “cash will remain critical in much of the world for the foreseeable future.” But that doesn’t mean that Western Union isn’t focused on building its mobile reach.

“The trick is obviously combining digital and with retail payout different dynamics. Our omnichannel strategy is working,” Ersek commented, as he answered a question about Western Union’s plans to build its mobile strategies in multiple regions. This includes opening a new digital hub in Asia.

Because of the positive quarter, CFO Raj Agrawal increased the full-year outlook and projections for the year.

“In the quarter, consumer money transfer trends benefited from ongoing strength from U.S. Outbound and high digital growth across most of our online markets. Western Union Business Solutions and Consumer Bill Payments also delivered good results. In addition, cost savings initiatives and foreign exchange hedges helped drive operating margin improvement, and we continued to generate and deploy healthy cash flow for our shareholders,” Agrawal said.

While Ersek was pressed by analysts to provide reaction on the impending PayPal and Xoom acquisition deal, he declined to comment on specifics of either company and spoke only in general terms about the industry as a whole.

“To build up online business is not that easy and propping money there is not easy. You need some countries of bank licenses, you need compliance requirements, you need to register customers, know your customers, know your age on the receive side. It’s a quite complex part which we have been doing that for many years and very successfully,” he said.



Digital transformation has been forcefully accelerated, but how does that agility translate into the fight against COVID-era attacks and sophisticated identity threats? As millions embrace online everything, preserving digital trust now falls mostly on banks and FIs. Now, advances in identity data and using different weights on the payment mix afford new opportunities to arm organizations and their customers against cyberthreats. From the latest in machine learning for fraud and risk, to corporate treasury teams working in new ways with new datasets, learn from experts how digital identity, together with advances like real-time payments, combine to engender trust and enrich relationships.

Click to comment