The Western Union Co. WU and BDO Unibank have extended their relationship to expand reach in the Philippines.
Per the pact, more than 1,100 BDO Unibank branches will now serve as Western Union agents providing international money transfer services across the world.
Customers not having bank accounts at the BDO Unibank will also be able to receive money at any of the Unibank branches or its subsidiary, One Network, Inc.
In April this year, Western Union collaborated with Coins.ph, one of Philippines' leading e-wallet providers, to allow more than five million customers to receive money directly in their Coins.ph wallets.
Western Union is making efforts to capture the vast remittance market of Philippines, since an estimated 10 million Filipino workers reside overseas, creating huge demand for money transfer services.
According to the World Bank, the Philippines ranked as the world’s fourth largest remittance receiving country in 2018. Western Union has been providing money transfer services in the Philippines since 1990 and has more than 12,000 Agent locations in the country. Another money transfer company, MoneyGram International Inc. MGI, also provides its remittance services in the country.
To expand its agent network and reach, Western Union has been making several tie ups and partnerships with banks, retailers and post offices across the globe. These tie ups and partnerships are in line with the company's efforts to grow its market share amid rising competition from many fintech companies such as PayPal Holdings, Inc. PYPL, Square Inc SQ and others. These companies entered the payments space in recent years and are fast eating into the market share by dint of their low cost and efficient services.
Western Union has also streamlined its business operations by the recent sale of three of its businesses — Speedpay, U.S. domestic bill pay business; Walletron, a provider of mobile bill presentment solutions and Paymap, mortgage payments services.
Part of the funds generated from the above businesses will be used for share buyback and debt payoff, which will aid the company’s bottom line and reduce its leverage.
The company's revenues have been under pressure. High compliance costs and foreign exchange volatility have further weighed on its profitability.
Year to date, its stock is up 25% compared with the industry's growth of 38%.
Western Union carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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