It was a two-for-one kind of day from Western Union. It released its Q2 earnings Wednesday (Aug. 4) alongside the announcement of its plans to sell Western Union Business Solutions to Goldfinch Partners and the Baupost Group for approximately $910 million in cash, according to the release.
Western Union Chief Financial Officer Raj Agrawal told Karen Webster that it’s the right move for the business right now. Goldfinch and Baupost are good buyers for the business, he noted, and the sale will add nearly a billion dollars to WU’s sizeable war chest to invest in and focus on “the things that we’re really good at,” which is enabling money in minutes between senders and receivers anywhere in the world.
See more: Western Union CFO On Thinking Outside The Box To Digitize The Enterprise
Specifically, he noted, in creating and growing a greater connected ecosystem for their 150 million global users by using its global payments network as the cornerstone for giving the global citizens living and working in emerging and developing economies and consumers a more connected digital commerce experience.
The Next Frontier
Agrawal told Webster that the playbook for doing that would be consistent with what they are hearing from their current consumer base, which includes having an account with Western Union and access to a variety of services that connect to it within the Western Union ecosystem, including financial services, insurance products and even loans.
“As a consumer of Western Union services, I would love to have a deeper relationship with the company,” Agrawal said. “I’d love to have an account and to have money on deposits. I’d love for my recipient to be able to maybe even pull money from my account and have an ecosystem to interact in.”
It’s new territory and an expansion that will require investment, Western Union President and CEO Hikmet Ersek told Karen Webster in a conversation earlier this summer. One the firm needs to make if it’s to provide more capabilities for its customers and enable its partners to reach the hundreds of millions of global citizens who may be less accessible to them, Ersek said.
Read more: Western Union CEO: Bringing Global Citizens Into The Connected Economy
Now, Agrawal noted, in stepping away from Business Solutions, Western Union can focus on and accelerate that plan.
Building From A Strong Starting Point
Western Union, Agrawal said, has more than 9 million Western Union.com users, who already trust WU with their money and their most precious of all use cases — sending it home to family and friends.
“We can do many new things with these customers because they have that trust,” Agrawal said.
In Q2, he said that digital money transfer grew to a new quarterly high of over $265 million in revenue, totaling more than $500 million for the first half of the year and 24 percent of consumer revenues. During Q2 2019, that number was in the mid-teens, Agrawal said, making the total consumer business slightly ahead of where it was two years ago.
The digital business, he said, is on track to exceed $1 billion by the end of 2021.
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