Western Union was established as a telegraph company in the mid-19th century, and began money transfer operations in 1871. Its telegram and business communication services ceased in 2006, but by this time the money transfer business had long been Western Union’s main revenue source.
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Western Union has enjoyed a decade of continuous profitability, firmly establishing itself as a leading telecommunications company. It is a leading player in the global cross-border money transfer market with a market share of 17%.
In 2011, Western Union reported that 84% of its annual revenue was derived from consumer-to-consumer money transfer services, 14% from consumer-to-business transfers, and 2% from other services.
Your key questions answered
- How has economic migration drive demand for remittance services in the global market?
- How will Western Union respond to the challenges posed by increasing regulation and competition?
A LEADING ELECTRONIC COMMUNICATIONS PLAYER
- Its original business was providing electric telegraph services
- The telegraph had technical similarities to modern communication systems
- Western Union has faced indirect competition more than once in its history
- The company was briefly present in the telephone market
- Since 1879, Western Union has focused on data transmission services
- By 1980, money transfers overtook telegram delivery as its main revenue stream
- Western Union now offers a range of money transfer service options
ECONOMIC MIGRATION DRIVES DEMAND FOR REMITTANCE SERVICES
- C2C transfers dominate Western Union’s revenue
- People are moving from lower income to higher income countries
- Annual remittance values are increasing globally
- Western Union’s C2C business has benefited from these global trends
- Expanding infrastructure allows Western Union to exploit growth in remittances
THE FUTURE: REGULATION AND COMPETITION
- Regulation is increasingly stringent
- Prices are tending to fall
- Focus on core business allows Western Union to benefit from macroeconomic and demographic trends
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