Western Union Co.’s WU unit — Western Union Business Solutions — recently tied up with ELITE, which is the international business support and capital raising programme of London Stock Exchange Group. The collaboration is intended to provide enhanced services suite to fast-growing companies in the U.K.
Notably, ELITE offers required skills, capital and networks necessary for expansion of more than 1,500 private companies in the U.K. Apart from the U.K., it provides similar assistance to more than 43 countries as well.
The alliance involves integration of invaluable expertise of Western Union Business Solutions with ELITE’s international business platform. Together they will work on devising effective payment strategies for fast-growing businesses with high growth potential. These initiatives, in turn, will provide stimulus to several fast-growing companies in the ELITE ecosystem for operating efficiently in the global markets. Collaborating with Western Union will not only strengthen ELITE’s global presence but also position it well for long-term growth.
Shares of this Zacks Rank #3 (Hold) company have gained 12.4% in a year’s time compared with the industry’s growth of 9%.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The price performance looks decent in comparison to other companies’ stock movement in the same space, such as Repay Holdings Corporation RPAY, Global Payments Inc. GPN and Visa Inc. V, which have returned 154.8%, 17.1% and 13.9%, respectively, in the same time frame. All the three companies carry the same Zacks Rank as Western Union.
Western Union, which has a strong network spanning across more than 200 countries and territories, looks intent on tapping the high growth potential of small and medium scale firms and businesses. Last week, the company’s WU EDGE platform got connected to the digital trade platform of Morgan Goodwin — EdgeCTP. The integration aims at enhancing the internal capacity of small and medium enterprises (SMEs) operating in the United States and the U.K, which is likely to provide them a competitive edge over large scale businesses. The new deal simultaneously will also offer seamless digital trade transactions, which will aid several SMEs to engage themselves in global markets.
Such steps reflect the growing importance of online digital trading amid the ongoing market volatility induced by the COVID-19 pandemic. Notably, Western Union has also been proactive in providing assistance to small businesses, which are integral to the U.S. economy. These businesses, which have been adversely impacted by the COVID-19 pandemic, will be able to get loans from Western Union via its U.S. Small Business Administration Paycheck Protection Program. Notably, such an initiative is likely to alleviate the financial crunch of these small businesses to certain extent.
Furthermore, these initiatives bode well for Western Union, considering the present situation of the remittance industry that has been under pressure due to the coronavirus pandemic. This world leader in money remittance, however, witnessed a nearly 30% decline in business volumes, both in late March and early April. Nevertheless, the rate of contraction in Western Union’s business started moderating in mid-April, led by an improvement in retail channel and a significant acceleration in digital growth. The same trend continued in May with digital transaction growth for the month reaching its peak in a decade.
Given the company’s vast global reach, wide agent network and a solid capital position, Western Union continues to gain a firmer foothold on the large and fragmented cross-border payments and remittance market.
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