World’s leading money-transfer company, Western Union Co. (WU), has announced the introduction of its international money-transfer service in Myanmar. The company will provide this service through an alliance with the Myanmar Oriental Bank.
Western Union’s initiative to foray into Myanmar, a South-East Asian country comes a week following the withdrawal of investment and trade bans in the country by the U.S., European Union and Australia. It sees an attractive market opportunity in Myanmar since it is estimated that more than 2 million residents of Myanmar will be employed in countries such as Thailand, Malaysia, Singapore, Bangladesh, Japan, Korea, US, Europe and Australia. This is expected to generate huge remittance demand for the expatriate Myanmarese to remit funds back home.
Western Union has chosen Oriental Bank, since the latter has a fairly long history (19 years) of successful operation in the country. It was also one of the first private banks to receive authorization to carry out foreign currency services in the country. The bank has a well established network in 19 locations in Myanmar. The main cities served by the bank are Yangon, Mandalay, Mawlamyaing and Monywa.
Western Union’s money-transfer service will now enable Myanmarese to send money back home securely and at a reasonable cost.
Western Union is aggressively expanding its international money transfer service. Last week, the company announced to introduce its business-to-business money-transfer facility in three new regions – Chile, Cyprus and Jordan.
Given the weakness in the western countries of Europe and the U.S., Western Union contemplates revenue growth from the Asia-Pacific region. The region accounts for 12% of the company’s total revenues. During the most recent concluded second quarter, the company’s Asia-Pacific region registered a revenue growth of 4%.
Rival MoneyGram International Inc. (MGI) is also expanding its international presence. At the beginning of this week, it announced a deal with Nova Bank to provide money transfer service in Eastern Europe.
Western Union currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term ‘Neutral’ recommendation on its shares.
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