A recent survey made by the money transfer company, Western Union Co. (WU) found out there has been a increased use of mobile, online, credit card and debit card to make their monthly payments.
The study found that while people continue to use in-person and mail services to make their payments the above mentioned technical methods are fast gaining acceptance. The popularity of these tech friendly ways of making payments is driven by their accuracy, speed, location advantage as well as 24X7 service availability.
The global payments industry has evolved with technological innovations that have created new methods of processing payments from consumers to businesses. The United States is in the midst of a trend away from cash and paper checks for bill payments toward electronic payment methods accessible through multiple technologies.
Western Union, one of the leading money transfer companies around the globe, is increasing its investments in high-growth electronic channels to build a world-class customer experience. These efforts are paying off in rapid growth in digital, account based money transfer, and mobile. Online, westernunion.com money transfer transactions grew more than 40% in 2012, while transactions for electronic account based money transfer through banks surged more than 50%.
During the second quarter, the company’s digital business witnessed a good growth. Its online channel, Westernunion.com again delivered strong results, with Money Transfer transaction growth of 68% and a revenue increase of 25% in the quarter. U.S.-originated online transactions increased over 75% in the quarter.
Total electronic channel revenue, which includes westernunion.com, account-based money transfer through banks, and mobile, increased 26% in the quarter. Electronic channels represented 4% of total company revenue, up from 3% of revenue in the year-ago period.
In addition to the strong growth from westernunion.com, transactions from account-based money transfer through banks increased 51%. Prepaid revenue, including third-party reload, declined 9% in the quarter, primarily due to softness in our U.S. business.
Management is targeting $500 million of revenues from the digital business (westernunion.com/mobile) by 2015, which implies a 60% CAGR revenue through 2015.
Western Union currently retains a Zacks Rank #3 (Hold).
Other players providing online money transfer facility are Visa Inc. (V), Fiserv, Inc. (FISV), and MoneyGram International Inc. (MGI) among others.Read the Full Research Report on WU
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