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Western Union Ties Up With AXA to Offer Insurance Products

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Western Union Co. (WU - Free Report) recently collaborated with AXA, which has a solid insurance and asset management business. Headquartered in Paris, France, AXA offers a diverse range of financial services to 108 million customers across 57 countries.

The tie-up basically aims to provide life and disability insurance products at reasonable costs, thereby benefiting Western Union’s clients in France. Further, the insurance offerings will be provided through the company’s global omni-channel platform. Initially launched as a pilot program in France this week, the ‘Transfer Protect’ program provided a EUR1,000 AXA life and disability insurance product for one month at free of cost. The product has primarily been offered to those clients of Western Union, who send money to 10 African countries through its digital platform. Both the companies will strive to scale up the program in the days ahead.

Apart from providing enhanced money transfer and payment services, this move clearly underlines Western Union’s efforts to foray into providing adjacent financial services. These insurance offerings will certainly provide a sigh of relief to several migrant workers and their family members as one family member will be entitled to a lump sum amount in case of any qualifying life or disability events during the policy period.

Shares of this Zacks Rank #3 (Hold) company have gained 9% in a year’s time compared with the industry’s growth of 7.8%.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The price performance looks decent in comparison to other companies’ stock movement in the same space, such as Repay Holdings Corporation (RPAY - Free Report) , Global Payments Inc. (GPN - Free Report) and Visa Inc. (V - Free Report) , which have returned 147.5%, 11.6% and 11.7%, respectively, in the same time frame. All the three companies carry the same Zacks Rank as Western Union.

Moreover, this is not the first time that Western Union is making an effort to strengthen presence in France. This January, it expanded ties with La Banque Postale, which is one of the major banking networks in France. By virtue of this extended collaboration, more than seven million online customers registered in La Banque Postale’s mobile app and website have access to the digital payment platform of Western Union.

Notably, Western Union has been striving to add customers via its digital platform across several countries globally. As a result, it has enabled customers to send funds digitally across the world from more than 75 countries. This had clearly led to strong digital business, which however, witnessed a decline of nearly 30% in business volumes in late March and early April primarily due to the COVID-19 pandemic-induced financial turmoil. Nevertheless, the rate of decline in the business started moderating in mid-April, led by an improvement in retail channel and a significant acceleration in digital growth. The same trend continued in May with digital transaction growth for the month reaching its peak in a decade.

We believe the company has built a solid digital money transfer platform on the back of massive investments and strategic alliances. This has helped Western Union to somewhat bounce back amid the pandemic. Further, the pandemic-induced scenario witnessed customers preferring digital mode of money transfers over physical means. Also, one of the main reasons for growth in the company’s digital channels has been customers’ growing trust on the brand over the years.

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