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Western Union (WU) Expands Digital Growth Via Stake in stc pay
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The Western Union Co. (WU - Free Report) has announced that it will buy 15% ownership in Saudi Digital Payments Company for up to $200 million. The transaction is expected to close in the first quarter of 2021, subject to receiving all regulatory approvals.
Saudi Digital Payments Company or stc pay is a fully-owned subsidiary of Saudi Telecom Company. This move marks Western Union’s strategy to expand its digital payments platform.
stc pay is perfect for Western Union and will provide it with an easy entry in Saudi Arabia by virtue of its leading position with a customer base worth more than 4 million. stc pay rapidly evolved into a digital wallet service provider in recent years.
Western Union already has a partnership with stc pay. They together provide money transfer services that allow stc pay’s users to send money from its app to more than 200 countries and territories in above 130 currencies through Western Union’s extensive global network of accounts, wallets, cards and retail.
Western Union, which was once a completely bricks-and-mortar money transfer company, is investing heavily in developing its digital money transfer platform to stay ahead of the rapidly-changing remittance industry. Digitalization is the new way of life and the remittance industry is undergoing a sea change in the way funds are being moved across borders on a real-time basis at a fraction of the earlier costs when companies would operate their stores at remittance locations.
Several fintech companies like OFX, WorldFirst, TransferWise, WorldRemit, Ria, Azimo and Remitly are crowding the remittance market, thereby revolutionizing the space with their smart technology offerings, which facilitate transfer of funds via electronic modes.
These fast-coming changes also posed significant competitive challenges to even an age-old, established player in the market like Western Union. The company’s revenues have been under pressure over the past many years due to rising competition. Grappled with this issue, the company prioritized investment in its digital money transfer arm as one of its key strategies to achieve long-term growth.
In fact, substantial work done on the digital front enabled this payment processor to tide over the prevalent difficult operating conditions posed by COVID-19.
The company invested substantially over the past decade in building a leading omnichannel platform for cross-border and cross-currency money transfers and payments. The company’s vast network powered with digitalization aids Western Union to deliver money and payments effectively through multiple channels across the globe.
When COVID-19 hit, the strong momentum of westernunion.com combined with acceleration in digital partnership transaction drove 45% growth in digital revenues, representing 21% of Western Union’s consumer business and trended at an annual rate of more than $900 million. Digitally initiated transactions accounted for 31% of C2C segment transactions, up from 15% in the third quarter of 2019.
Importantly, this digital growth is largely incremental to the company’s business and has a strong profit and customer lifetime value. Customers are drawn to Western Union to send money virtually anywhere with confidence, given the quality of its network since most of its agents are well established in essential businesses like financial institutions, postal institutions or large retailers.
To keep the westernunion.com’s growth trend alive, the company will continue to invest in acquiring customers and enhancing services like real-time payments.
Some other companies active in the digital money remittance space are MoneyGram International Inc. , PayPal Holdings Inc. (PYPL - Free Report) and Square Inc. (SQ - Free Report) among others.
Year to date, the stock has gained 9.5% against its industry’s decline of 12.4%.
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Western Union (WU) Expands Digital Growth Via Stake in stc pay
The Western Union Co. (WU - Free Report) has announced that it will buy 15% ownership in Saudi Digital Payments Company for up to $200 million. The transaction is expected to close in the first quarter of 2021, subject to receiving all regulatory approvals.
Saudi Digital Payments Company or stc pay is a fully-owned subsidiary of Saudi Telecom Company. This move marks Western Union’s strategy to expand its digital payments platform.
stc pay is perfect for Western Union and will provide it with an easy entry in Saudi Arabia by virtue of its leading position with a customer base worth more than 4 million. stc pay rapidly evolved into a digital wallet service provider in recent years.
Western Union already has a partnership with stc pay. They together provide money transfer services that allow stc pay’s users to send money from its app to more than 200 countries and territories in above 130 currencies through Western Union’s extensive global network of accounts, wallets, cards and retail.
Western Union, which was once a completely bricks-and-mortar money transfer company, is investing heavily in developing its digital money transfer platform to stay ahead of the rapidly-changing remittance industry.
Digitalization is the new way of life and the remittance industry is undergoing a sea change in the way funds are being moved across borders on a real-time basis at a fraction of the earlier costs when companies would operate their stores at remittance locations.
Several fintech companies like OFX, WorldFirst, TransferWise, WorldRemit, Ria, Azimo and Remitly are crowding the remittance market, thereby revolutionizing the space with their smart technology offerings, which facilitate transfer of funds via electronic modes.
These fast-coming changes also posed significant competitive challenges to even an age-old, established player in the market like Western Union. The company’s revenues have been under pressure over the past many years due to rising competition. Grappled with this issue, the company prioritized investment in its digital money transfer arm as one of its key strategies to achieve long-term growth.
In fact, substantial work done on the digital front enabled this payment processor to tide over the prevalent difficult operating conditions posed by COVID-19.
The company invested substantially over the past decade in building a leading omnichannel platform for cross-border and cross-currency money transfers and payments. The company’s vast network powered with digitalization aids Western Union to deliver money and payments effectively through multiple channels across the globe.
When COVID-19 hit, the strong momentum of westernunion.com combined with acceleration in digital partnership transaction drove 45% growth in digital revenues, representing 21% of Western Union’s consumer business and trended at an annual rate of more than $900 million. Digitally initiated transactions accounted for 31% of C2C segment transactions, up from 15% in the third quarter of 2019.
Importantly, this digital growth is largely incremental to the company’s business and has a strong profit and customer lifetime value. Customers are drawn to Western Union to send money virtually anywhere with confidence, given the quality of its network since most of its agents are well established in essential businesses like financial institutions, postal institutions or large retailers.
To keep the westernunion.com’s growth trend alive, the company will continue to invest in acquiring customers and enhancing services like real-time payments.
Some other companies active in the digital money remittance space are MoneyGram International Inc. , PayPal Holdings Inc. (PYPL - Free Report) and Square Inc. (SQ - Free Report) among others.
Year to date, the stock has gained 9.5% against its industry’s decline of 12.4%.
Western Union carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>