Western Union Financial Services Inc. has been quietly expanding its Internet payment options and recently added a Web service that lets billers accept online payments.
Most large financial institutions and billers already accept online payments, and Western Union, a unit of First Data Corp. of Denver, is asking insurance companies, smaller financial institutions, and many of its other commercial customers to do the same.
Its Consumer Web Payment Service has been available to commercial clients for several months but will be formally announced this week, the company said.
Consumers who log on to a participating biller's site are directed to a link (whose design is customized by the client and Western Union), and enter their account information. After signing up, each consumer's payment information is retained in the system and pops up when another payment is about to be made. The funds are debited electronically from the consumer's checking account.
This "is another solid product in our payment solutions," Joe Jackson, the president of Western Union's commercial services division, said in an interview. "We are aiming to offer our clients a whole suite of bill payment capabilities."
Web payments will not replace make phone payments obsolete, but rather will "complement" them, Mr. Jackson said. Western Union's commercial clients have already expressed "significant interest" in the service, he said. "This is driven by our clients' needs. It is important to our business to round it out."
Last month First Data bought E Commerce Group Inc., a New York electronic payments firm, to expand its electronic payment offerings. Mr. Jackson said that he expects the company to grow stronger in e-payments by making acquisitions and introducing new products.
Craig Peckham, an equity analyst at Legg Mason Wood Walker Inc., said that Western Union has been "working hard" to enhance its expertise in electronic payments, but "the reality was that it has had phenomenal success through more traditional channels."
The First Data unit must stay competitive in all payment fields, he said. "It seems to me that Western Union is best suited to a face-to-face format that is hosted by an individual," but it must make strategic investments to keep from falling behind technologically.
He said he would be surprised if these investments had a significant effect on revenues in the near future.
When it comes to electronic payments, First Data "wants be sure that they are well prepared for a market that will dictate its own direction," Mr. Peckham said.
