Western Union's Digital Investments To Strengthen Its Hold

World’s leading money transfer company, Western Union Co. (NYSE:WU) is consistently taking initiatives to shore up its presence in the rapidly evolving digital payments markets.

The company, which until few years ago had little or literally no presence in the electronic payments space, is now deriving 8% of total consumer to consumer segment revenues. It also witnessed a revenue growth of 19% during the second quarter.

Digitally initiated money transfer, which includes westernunion.com and Mobile Money Transfer, is the fastest-growing segment of the market that is bringing new customers to Western Union.

In order to keep pace with technological advancements in the money transfer business, the company had developed services like prepaid, westernunion.com and mobile money transfer. The company continued its digital expansion by introducing upgraded mobile transaction apps for westernunion.com in eight markets. With these, the company’s digital presence is available in 37 countries, with mobile apps in 11 of these.

The company also introduced WU Connect which allows it to offer cross-border money transfer services on third-party platforms, such as social media and messaging companies, among others. In 2015, the company signed WU Connect partnership agreements with WeChat, and Viber. Recently, the company added its money transfer services to the Yandex.Money mobile app in Russia.

On the second-quarter conference call, the company disclosed that via its online platform, westernunion.com, mobile continues to lead the way in the U.S. with nearly 60% of the countries westernunion.com transactions initiated on mobile in the quarter.

The company also activated thousands of business customers on its new WU EDGE digital platform.

The company believes that these offerings will generate incremental revenues for the company over the long term.

We expect the digital business to continue being a long-term growth driver, as the company plans to increase its usage through added capabilities, enhanced value propositions and expanded reach.

Western Union carries a Zacks Rank #3 (Hold). Some better-ranked stock in this space are JetPay Corporation (NASDAQ:JTPY) , WEX Inc. (NYSE:WEX) and SLM Corporation (NASDAQ:SLM) . While WEX Inc. carries a Zacks Rank #1 (Strong Buy), the other two stocks have a Zacks Rank #2 (Buy).