Western Union Ramps Up Digital Efforts Amid Coronavirus Woes
The Western Union Company WU continues to enhance its digital money transfer services for encouraging customers to stay at home and contain the coronavirus spread. The digital money transfer services are now available across 75 countries and pay out into a global widespread network of four billion accounts and wallets in 100 countries along with an impressive retail network across 200 countries and territories.
The company has been coordinating with its agents, partners and regulators to provide uninterrupted fund transfer facilities to communities. Its initiatives include easier onboarding, services like ‘Digital locations’ available in certain countries, etc.
Rationale Behind the Step
The underlying intention of the company is to help customers with easy transactions via its vast network of digital channels during the global pandemic. Customers can enjoy an end-to-end digital payments experience while following community restrictions and stay-at-home orders.
Increased transactions, in turn, are likely to boost the company’s digital business, which has been witnessing solid growth over the past many years. Revenues from the digital platform, which generate substantial businesses for Western Union, registered a 25% rise year over year in the fourth quarter of 2019. Additionally, the westernunion.com channel became integral to the company’s business, accounting for nearly 15% of total money transfer revenues in 2019.
The company’s digital offerings cater to all the globally leading 20 remittance-sending countries, per the World Bank ranking.
The company’s strong financial position allows it to remain committed to serve its customers through its wide network. Customers’ trust and confidence in every transaction they make gained more importance amid the prevalent uncertainty revolving around the COVID-19 syndrome.
On Mar 26, 2020, the company came up with a new channel, Digital Location, piloted in Austria, Belgium, Italy, Portugal and Oman to allow customers to connect in several different languages via a voice or video call with a money transfer personal-service assistant who will solve their transaction-related queries. Customers will electronically close their money transfers with the aid of cards for payout into Western Union’s Global Network.
These updates issued by the company also seem to restore customers’ confidence in the company. We believe that an uptick in digital transactions is likely to boost the overall business.
However, the company has withdrawn its earlier-provided earnings guidance for 2020 following the COVID-19-induced business uncertainty.
In a year's time, shares of the Zacks Rank #3 (Hold) company have lost 4.2%, wider than its industry's decline of 3.3%. However, factors like growing digital platform and business streamlining would likely help the stock bounce back going forward.
The price performance looks better than other companies in the same space, such as Alliance Data Systems Corporation ADS, FleetCor Technologies, Inc. FLT and WEX Inc. WEX, which have shed 80.8%, 25.4% and 47% of value in the same time frame. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.