Western Union’s first quarter results took note of continued shifts to digital channels to send money across borders.
Branded digital transactions grew by 13% year over year (YoY), the company detailed in its materials.
CEO Devin McGranahan said during the conference call with analysts that consumer money transfer transactions 6% growth rate marked the third consecutive quarter with 5% or more transaction growth.
Adjusted revenue growth was 3%, YoY, to a bit more than $1 billion.
“The macro backdrop remains consistent with what we have seen for the last couple of quarters,” he said, adding, “We continue to see elevated inflation and higher interest rates around much of the world.”
Immigration around the world is “showing no signs of slowing down,” he said. The migrant population in the United States reached 51 million people earlier this year.
“Our research would indicate that many migrants start their remittance journey in a retail setting for a variety of important reasons. Given the likely future ongoing growth and migration around the world, we believe that macro trends support the fact that we can indeed stabilize our retail business while at the same time growing our digital and consumer services businesses,” McGranahan said.
During the quarter, the company processed about 2 million Quick Resend repeat transfers, up from roughly half a million of those transactions in the second quarter of 2023.
Drilling down into regional activity, in the first quarter, European region grew transactions at a 5% YoY growth rate — which the CEO termed a “marked improvement” from the double-digit declines of recent years.
He said that retail money order and bill payments-related activity will continue to grow, but “We believe the majority of the future incremental growth within consumer services will come from products and services we have launched in the last 18 months or are planning to launch in the near future … like prepaid debit cards, foreign exchange, and the ancillary revenue streams associated with our digital wallets.” By way of example, he added that as of last month, in Brazil, 35% of active monthly users conducted a bill payment transaction.
CFO Matthew Cagwin said on the call that in North America, send amount principal per transaction was up 1% YoY, “which is further proof of our customers ability to navigate the high inflationary environment that they have experienced in recent years.” He said that consumer services growth should be in the double-digit percentages going forward.
Management noted on the call that the company is nearing the end of its efforts to migrate its core processing and settlement platforms to the cloud — which will enable Western Union to move money more quickly around the globe.
Shares were up 3% in after-hours trading Wednesday.
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