World's leading money transfer company, Western Union Co. ( WU ) has forged an alliance with Bank of China. Per the agreement, the money transferor will provide service throughout mainland China via the bank's branches.
Bank of China customers will be able to receive remittances directly to their online banking-enabled accounts and at select self-service kiosks.
The agreement will expand the reach of Western Union in China as the services, effective Jan 2015, will be offered from 10,000 locations across the country.
China specifically appears an attractive market for Western Union. The company has been operating in that country since 1995. Now, dynamic factors such as rising migrations both domestic and international, a boom in mobile Internet users and employment of effective and efficient policies by the government of China, make room for further growth in the region.
The company has picked up Bank of China since it is one of the most globally diversified Chinese commercial banks. The partnership will shoot up Western Union Money Transfer services to more than 32,000 locations in China, in cooperation with 15 agents.
In China, the use of the online mode of fund transfer has gained immense popularity because of a high Internet penetration rate and a lower transaction cost than branch transfers where people have to be physically present. Therefore, major banks in China have been investing in the online portal development in order to cater to the growing demand of electronic money transfer. Western Union's peer Moneygram International Inc. ( MGI ) also has a presence in China.
For Western Union, tie-ups with regional banks have always been a preferred way of easy expansion. The company holds partnership with other banks such as Dubai Bank, IndusInd Bank and Kotak Mahindra Bank in India, and Amana Bank in Sri Lanka.
Western Union carries a Zacks Rank # 2 (Buy). Other sector players worth considering include Envestnet, Inc. ( ENV ), Fidelity National Information Services, Inc. ( FIS ) and Higher One Holdings, Inc. ( ONE ). All these stocks sport the same rank as Western Union.