Western Union rewrites remittance playbook

Dash acquisition supports lending, payments, and other consumer services.

Western Union Company is expanding beyond money transfers into lending, payments, and other digital financial services as it adapts to changing customer behaviour and growing competition from digital wallets, a senior executive said.

“Traditionally Western Union has focused on the sender. It was all about understanding what the sender needs to move the money, whether that's remittance fee, the best FX (foreign exchange) rate, the best fund out options,” Vince Tallent, senior vice president and head of Asia Pacific at Western Union, told Asian Banking & Finance in a Microsoft Teams interview.

He said financial technology (fintech) companies have shifted attention towards the receiver, prompting Western Union to broaden the services offered through digital wallets.

Tallent said Western Union wants digital wallets to become a platform for more financial services rather than just receiving remittances.

“We’re going beyond to understand a customer, and a customer’s needs that go beyond the remittance transaction,” he said.

Tallent said Western Union's acquisition of Dash digital wallet from Singapore Telecommunications Ltd., completed in April, gives the company a platform to offer services beyond remittances.

He said transaction data collected through the wallet could help Western Union assess customers' creditworthiness and eventually offer loans. The company also plans to let customers use remitted funds to buy services such as mobile data.

“The first thing receivers do usually when they get their remittance money is top up their mobile phone or buy some data,” Tallent said.

He said Western Union also plans to improve how Dash handles cross-border payments by expanding the number of remittance corridors available through its global network.

Beyond Dash, the company partners with hundreds of digital wallets and financial institutions worldwide, including Tencent and GCash.

“The partners are now not agents, but they're banks, they're digital wallets, they're fintechs,” Tallent said.

Western Union also launched its first stablecoin, the US Dollar Payment Token, in May. Despite the company's digital expansion, Tallent said cash would remain important for many customers who are not ready to rely entirely on digital wallets.

“Cash will still be important, and it still is important to specific segments who don’t want to necessarily use an application to send money,” he said.

Western Union operates about 370,000 retail locations globally, including 185,000 across the Asia-Pacific region, which Tallent said would continue serving customers who prefer cash transactions.