Western Union hopes to someday return to 2019 levels of in-person money transfer activity, and its recent pact with Walmart is a big part of that strategy.
Western Union announced early in the year that it would add
The new Walmart agreement gives Western Union more of a physical presence in the U.S. after several years of already working with the giant retailer in Mexico and Canada, Western Union president and CEO Hikmet Ersek said during the company's first-quarter earnings call on Wednesday.
"In the U.S. relationship, we have already enrolled like 20% of the locations and by the second quarter, we will have all 4,700 locations enrolled," Ersek said. "We are already seeing good signs of customer interest, and we have not done marketing yet. In our forecasts, we hope later this year it will have an impact on our growth rates."
For the first quarter, Western Union reported net income of $181 million, a 3% year-over-year increase. Revenue rose 2% to $1.2 billion. Digital money transfer was a standout segment, growing 45% to a new high of $242 million for the quarter.
Digital revenue "is going to moderate in the second and third quarter and that is what we are expecting because we had the strongest growth at the beginning of the second quarter last year," Raj Agrawal, Western Union's chief financial officer, said on the call.
"We are probably not going to get back to 2019 levels in retail this year, but it really depends on what happens, like with Walmart and other initiatives in the second half of the year," Agrawal said.
Digital growth through WU.com and through various partners such as Saudi Digital Payments Co., or STC Pay, represented 23% of total consumer-to-consumer revenue and 34% of consumer-to-consume transactions.
C2C transactions increased 9% in the quarter, while revenue increased 4%.
Western Union Business Solutions revenue declined 2%, or 8% constant currency, and continued to improve sequentially, with declines due to lower hedging activity and the ongoing impact of COVID-19 on certain segment verticals.
Other revenue, primarily money orders and retail bill payments in the U.S. and Argentina, declined 18% because of the ongoing impact of COVID-19 and the depreciation of the Argentine peso.
WU.com revenue grew 38%, including cross-border revenue growth of 49%. The site's average monthly active users for the first quarter increased 46% year-over-year. It was the most downloaded mobile app among peer money transfer companies during the first quarter, according to data provided by mobile app marketing firm Sensor Tower.
Western Union continues to tout the strength of its migrant-family customer base, saying the spending power of this consumer segment was at $1.3 trillion in 2019 before the pandemic hit.
Ersek opened the earnings call by saying his company was concerned about the surge in COVID cases in India and that Western Union would do everything it could to help.
"Obviously, India is very important to us," he said. "We have millions of customers there receiving money, and thousands of employees going through a difficult time, not just there but all over the world."
Western Union's bank and post office locations are considered essential to the economy in India, Ersek said, adding that account payouts in the country represent one of the fastest-growing segments for Western Union because of the need for fast access to money for health care services and other essentials.
