The Western Union Company (WU - Free Report) recently expanded its long-standing collaboration with The Kroger Co. (KR - Free Report) through a new non-exclusive deal. Notably, Western Union and Kroger have been working together for 35 years with a mutual aim of enhancing digital services and offering seamless retail customer experience. By doing so, both the companies have in fact, paved the way for increased domestic and global digital money transfers over the years.
Following the deal extension, customers of Kroger, which has been the leading grocery retailer of America offering hassle-free digital shopping options, can keep using Western Union’s best-in-class global digital and retail services for local and worldwide money transfers, bill pay and money orders across more than 2,300 stores in the United States. It is worth mentioning that customers can not only execute a transaction via Kroger’s Money Services online portal but can also make payments in person.
Western Union’s worldwide network of bank accounts and wallets available at over half a million locations spanning across 200 countries and territories globally will enable Kroger customers to send money for pay out. In fact, customers can pay into or pick up funds from U.S. bank accounts through the 54,000 Western Union locations situated coast to coast within the country.
The latest move seems to be beneficial for both the companies as it is likely to boost the digital business of both Western Union and Kroger, which have been witnessing an uptrend for quite some time. While Western Union’s digital money transfer revenues including westernunion.com and digital partnerships increased 50% at constant currency in the second quarter, digital sales at Kroger soared 127% in the same quarter itself.
Intensified Focus on Boosting Digital Business
Western Union backed by its varied expertise to develop newer technologies, and large scale of business has emerged as a global leader for cross-border and cross-currency money transfers and payments.
Continued collaborations will enable the company, which currently carries a Zacks Rank #3 (Hold), to reach out to various corners of the world and strengthen presence via digital platform. These initiatives have not only expanded Western Union’s global reach but have also boosted value of its business. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Moreover, the company has been making significant investments in its digital money transfer arm and building a leading omni-channel platform. Its vast network powered with digitalization aids Western Union to deliver money and payments effectively through multiple channels worldwide. These investments are likely to have been made at an opportune time, since the value of global and cross-border trade is likely to witness a considerable rise in the next five years. Per a report issued by Western Union and Oxford Economics in August of this year, the value of international trade in services is anticipated to rise to $8 trillion by 2025 from $6.1 trillion in 2019. This represents an increase in the value of global flows by 31% during this above-stated period.
With digitalization being the new way of life, digital payments have been gaining momentum for quite some time, which positions Western Union well for long-term growth. The trend is likely to sustain even beyond the pandemic. We believe the company’s solid digital money transfer platform has somewhat helped the company to recover amid the pandemic.
Shares of Western Union have lost 8.7% in a year against the industry’s growth of 11%.
Shares of its peers, namely Square Inc. (SQ - Free Report) and PayPal Holdings Inc. (PYPL - Free Report) have gained 197.6% and 97.5%, respectively, in a year.
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