December 7, 2023


Dive Brief:

  • Western Union will unveil a new loyalty program early next year, CEO Devin McGranahan told analysts on a call last week to discuss the company’s third-quarter financial results, acknowledging the international money transfer company is still trying to achieve goals set under a new strategy last year. 
  • The company’s third-quarter revenue declined in three of the five global regions that it serves, relative to the same quarter in 2022, dropping in North America, Europe and Asia, even as the number of transactions rose or remained flat in those regions, according to its Oct. 25 financial release.
  • “The things that we’re working on, and will continue to work on, are improved transactional experiences for returning customers in both our retail and our digital environment,” McGranahan said on the call.

Dive Insight:

McGranahan, formerly a top executive at Fiserv, took the CEO post at Western Union last year, after being appointed in late 2021. He has set out goals for increasing demand from Western Union’s in-person customers at physical locations, referred to as the retail business, as well as with its online customers. Nonetheless, the strategy is expected to take years to execute, with goals to be achieved in 2025.

Denver-based Western Union provides money transfer services, both in-person and online, that tend to be used by migrants sending funds to family and friends in other parts of the world. The strong U.S. labor market has buttressed the business, the CEO said.

Still, competition in the arena has been rising, with fintech alternatives seeking to outdo legacy players, such as Western Union and MoneyGram, by creating digital options for customers and more cost-effective operations.

The company reported third-quarter net income slipped 2%, compared to the same period last year, to $171 million as revenue inched up 1% to $1.1 billion. 

The company is “beginning to see improvement in our retail retention rates in large markets like the U.S., however, given ongoing challenges in markets like Europe, our global year-to-date retention rate has been relatively flat to 2022,” McGranahan said on the call.

The CEO attributed the decline in some regions to the loss of “a couple of large important agents” in some areas and to macroeconomic challenges, among other factors.

Updating the loyalty program is one of his answers to driving more growth for the cross-border payments business, he said, without providing any details. “We will be launching a new loyalty program, hopefully in the first quarter of 2024, which we also think will help,” McGranahan said in answer to an analyst question on the call.

For Western Union’s existing loyalty program, “earning points on money transfers is currently on pause,” the company’s web site says. That program allowed members to earn points that could be used to reduce fees on money transfer services or toward purchases at some retailers.

The most significant improvement the company could give its users would likely be increased cashback benefits, said Lin Dai, CEO of SuperLogic, a Miami-based firm that provides software and services for loyalty programs.

A spokesperson for the company declined to provide additional details on the soon-to-be new program.

To improve results, Western Union has revamped a prepaid card product in the U.S.; rolled out digital wallets in Europe and South America; and piloted a lending program in Australia and Argentina, among other efforts. The company is also preparing to launch a digital wallet in the U.S., the CEO said on the call.

Western Union also seeks to improve its communications with customers, and improve its marketing to them, reaching out to them when they fall off their traditional patterns of using the company’s services to send money, the CEO said.


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