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In an effort to expand its mobile money transfer service, Western Union Co. (WU - Analyst Report) has announced a strategic agreement with, Ericsson (ERIC - Analyst Report). Per the agreement the company has certified Ericsson Wallet Platform via which customers using their mobile phones can transfer money through their phones.

Both the companies will complement each other in the capability, given a strong brand image enjoyed by them in their respective markets.

The company is aggressively embracing the use of new age technology for providing flawless service to its customers. Mobile payments are gaining momentum due to convenience and round-the-clock accessibility. This service is expected to witness faster adoption rate than any other electronic channel. The company has already in operation its mobile money transfer service in many of the regions of the world such as Afghanistan, Bangladesh, El Salvador, Guatemala, Indonesia, Kenya, Madagascar, Malaysia, Paraguay, the Philippines, Tanzania, Uganda, Vietnam, and the U.S.

We believe that Western Union’s participation in electronic channels like prepaid, mobile, and internet will boost its near-term earnings which should help offset pressures on its traditional paper-based product offerings.  

Of late Western Union had a rough patch with regulatory compliance issues due to which it had to cancel its agents in the Mexican region. The company also suffered revenue loss on account of these negative developments.

Western Union is trying to offset these pressures by developing and expanding additional new age services in the form of prepaid, online money transfer, bank to bank direct transfer etc.

Earlier during the month Moneygram International Inc. (MGI - Analyst Report), another company in the money transfer industry announced its mobile money transfer facility to the users of iPhone, Android or Windows 8 mobile devices in the U.S.

Among player in the financial services industry – H&R Block, Inc. (HRB - Analyst Report) with Zacks Rank #2 (Buy) is worth considering.

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