Earlier this week, leading money transfer company, Western Union Co. (WU - Free Report) announced the expansion of its existing agreement with ChinaPay – the online payment subsidiary of China UnionPay. Founded in 2000, China UnionPay is China’s government-backed inter-bank transfer network and credit card issuer.
ChinaPay provides online payments, banking, and brokerage services, as well as offline bill payment and point of service (POS) terminals. It is the third-largest online payment company in China.
As per the extended agreement, Chinapay will be able to make tuition fees payment to international universities across the globe in its local currency Renminbi, with the help of Western Union. Both the companies will jointly create a simple, fast and reliable gateway for the international universities as well as the Chinese population to conduct cross border transaction.
While Chinapay will use its online and mobile payment portals, Western Union Business Solutions will use its integrated foreign exchange and payment platforms to create a route, by which the transactions will be conducted and funds will be instantly debited from the payers’ UnionPay cards at the time of making payments.
Western Union is particularly focusing on expanding in China since a large population of students from this country goes abroad for higher studies, creating a huge market for international payments.
Western Union has also picked up the industry-leading online system – ChinaPay – since holds a very good market reputation in the country and has over hundreds of millions of users.
Western Union has a separate platform – FX Solutions – for Educational Institutions, which provide the education sector with state-of-the-art, customized solutions for making and receiving domestic and international payments. Western Union is already serving over 400 world-class universities in the U.S., Canada, the UK, and Australia by processing outbound vendor payments and inbound student tuition and fees of these institutions.
Western Union currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term ‘Underperform’ recommendation on its shares. Peer Moneygram International Inc. (MGI - Free Report) , also currently retains a Zacks #3 Rank.