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Western Union’s core customers are people sending money to other people, and its business relies heavily on migrants sending money internationally. Senders hand over funds at an agent location or initiate a transfer through a website or app. Western Union makes the money available for cash pickup or deposits it into the recipient’s account. The sender generally pays the fee; when currencies differ, Western Union also earns the difference between its customer exchange rate and the wholesale market rate. These transfers generate most of its revenue.
Most transfer revenue comes through agents, which receive commissions for collecting or paying out money. A relatively small group of large agents and partners supplies a substantial share of this business, though no single relationship dominates. Western Union also has a smaller bill-payment business, mainly in Argentina and the United States, earning transaction fees from customers and billers.
The business depends on international remittance demand and on keeping its agent and banking relationships working. Money-transfer licenses, anti-money-laundering rules and sanctions govern where and how it can operate; government restrictions can require it to stop serving particular countries.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Western Union’s results hinge on consumer remittance volumes and competitive pricing, so watch MoneyGram even though it is absent from this list.
Remitly Global, Inc. competes with Western Union for consumers sending money abroad, taking orders digitally and delivering funds to bank accounts, wallets or cash-pickup locations; senders pay transaction fees and currency-exchange margins. Watch its send volume and active customers for the scale of this digital competition.
Euronet Worldwide competes with Western Union for cross-border transfer customers and the agents who serve them, with pricing to both customers and agents part of the contest. Watch its Money Transfer business, which moves money and exchanges currencies for consumers and businesses, rather than its ATM or retail payment operations.
International Money Express, Inc. (Intermex) competes with Western Union for retail and digital remittances to Latin America, but Western Union has agreed to buy it for approximately $500 million in cash. Senders pay Intermex transfer fees; watch the remaining regulatory approvals for the planned acquisition of its business focused on U.S.-to-Latin America and Caribbean transfers.
Wise Group plc offers consumers a digital alternative to Western Union’s retail and digital cross-border transfers, connecting local banks and payment systems at both ends. Watch its personal-customer offering, Wise Account, while remembering that its reported cross-border payment volume also includes businesses.
IDT Corporation’s BOSS Money competes with Western Union to handle consumers’ domestic and international transfers, but remittances account for only a minority of IDT’s revenue. Watch BOSS Money rather than IDT’s overall sales: even its Fintech segment includes other financial businesses.
PayPal’s Xoom competes with Western Union for consumers sending remittances digitally, but other payments dominate PayPal’s broader business, which mainly earns fees for processing payments and related services. Xoom news is therefore more relevant to Western Union than PayPal’s overall payment volume.
Initial Jobless Claims (Oct/17)
Weekly jobless claims count new applications for unemployment benefits; because Western Union’s cross-border consumer transfers depend on migrants’ work and income, claims can signal whether senders can fund transfers and pay fees.
Expected200.0KLast release199.0K
If it comes in above expectations
If the reading is above the 200.0K estimate, it is above the previous 199.0K. More claims point to rising layoffs and a weaker labour market, which may leave migrants with less income to send through Western Union and reduce transfer-fee revenue.
If it comes in below expectations
Fewer claims point to a labour market holding up, which may help migrants maintain income to send through Western Union and support transfer-fee revenue.
Euronet Worldwide Inc earningsEEFT
Euronet competes with Western Union for cross-border transfer customers and agents, so its Money Transfer report will show how that contest is pressing on Western Union's activity and pricing.
Look at activity in Euronet's Money Transfer business alongside any signs of price competition for customers and agents. Steady activity without needing lower prices to retain either would suggest less pressure on Western Union; weaker activity or price cuts to keep business would signal pressure on its transfer volume and revenue per transfer.
Fed Interest Rate Decision
Western Union’s Fed-rate exposure runs through its roughly $2.9 billion of debt and commercial paper: rates affect what it pays to borrow and the income left after those costs.
Expected4.0%Last release4.0%
If it comes in above expectations
Higher rates can make repricing debt and new borrowing cost more, leaving less income after interest for Western Union’s operations and other uses.
If it comes in below expectations
Lower rates can make repricing debt and new borrowing cheaper, leaving more income after interest for Western Union’s operations and other uses.
JOLTs Job Openings (Sep)
Job openings track employers’ demand for workers; because Western Union’s cross-border consumer transfers depend on migrants’ work abroad, that demand can affect senders’ ability to pay transfer fees and the company’s fee revenue.
Expected7.0MLast release7.079M
If it comes in above expectations
More openings point to stronger hiring demand and wage pressure, which may support migrants’ ability to send money through Western Union and pay its transfer fees.
If it comes in below expectations
If the reading is below the 7.0M estimate, it is below the previous 7.079M. Fewer openings point to weaker hiring demand and wage pressure, which may reduce migrants’ ability to send money through Western Union and pay its transfer fees.
The Western Union Company earningsThis company
Western Union earns most of its revenue from consumer money transfers, and this report will show whether transaction activity and revenue per transfer can support that core business.
Read Consumer Money Transfer transactions, revenue and operating margin together. Steady transactions and revenue with a steady margin would show that demand and the fees and exchange-rate revenue on transfers still support the business. Falling transactions and revenue would point to pressure on the core business; if revenue holds but margin weakens, the question is whether it took higher costs or lower prices to hold it there.
Remitly Global, Inc. earningsRELY
Remitly's active customers and send volume show whether consumers are adopting digital remittances, the demand Western Union's digital transfer business also competes for.
Read Remitly's active customers and send volume together. Growth in both would show consumers continuing to adopt digital remittances, putting more of that demand in competition with Western Union's digital transfers. Weakness in both would mean less pressure from this channel, but would not settle demand for Western Union's overall transfer business.
Non Farm Payrolls (Oct)
The monthly jobs report tracks changes in employment; because Western Union’s cross-border consumer transfers depend on migrants’ job availability and income, employment can affect how much senders transfer and the fees they pay.
Stronger job growth may support migrants’ income and Western Union transfer activity; weaker job growth may constrain the amounts they send and the fees the company earns.
International Money Express, Inc. earningsIMXI
Western Union plans to acquire International Money Express, Inc.'s remittance business, and any approval update in its report will show how far the deal is from completion.
Look for an update on approvals for the planned acquisition. Progress would remove an obstacle to Western Union completing the deal and potentially adding Intermex's U.S.-to-Latin America and Caribbean transfers; if approvals remain outstanding, the timing and completion are still uncertain, so that business is not yet part of Western Union's operations.
