In the latest results presented by Western Union, a significant increase in the use of digital channels can be observed, which the management considers promising for the coming months and years. In the fourth quarter, the number of consumer money transfer transactions increased by 5%, and digital transactions under the company’s brand increased by 13%. Revenues from digital transactions also saw a growth of 4%.
Consumer money transfers at retail locations increased by 0.2%. CEO Devin McGranahan said during a conference call with analysts, “For nearly a decade, the company did not achieve transaction growth above 5% for several consecutive quarters, except for the post-COVID-19 period. We are pleased with such a significant change in our trajectory.”
The CEO also mentioned that the company’s new digital app is available in 12 countries, with over 200,000 customers declaring the use of the digital wallet in Europe and over 50,000 in Argentina. Furthermore, McGranahan added, “Our point-of-sale money transfer business, which we have dedicated the past 18 months to, has grown significantly over the past two years, with a main profit increase of almost 20%.”
According to CFO Matt Cagwin, the trends in the North American and Asia-Pacific markets are currently positive, and an improvement in transactional trends in the retail sector has been observed in Europe. The CFO added that consumer services are expected to continue growing at a double-digit pace, and omnichannel users generate 2.5 times more transactions than customers using a single channel.
McGranahan also stated that a significant percentage of new digital customers in 2023 will be individuals who previously used retail services, generating higher average revenue per user (ARPU) than customers acquired as “new digital franchise customers.” As he further emphasized, “We are focused on increasing revenue from our overall ecosystem strategy.” He highlighted that digital wallets will drive revenue growth while reducing customer churn.
The company expects adjusted revenues in 2024 to range from $4.1 billion to $4.2 billion. Investors responded to this information with a 1% drop in stock value after-hours.
Key Points:
– The use of digital channels by Western Union has seen the following growth:
– In the fourth quarter, consumer money transfer transactions increased by 5%.
– Digital transactions under the company’s brand increased by 13%.
– Revenues from digital transactions also grew by 4%.
– Consumer money transfers at retail locations saw a growth of 0.2%.
– Impact of the COVID-19 pandemic:
– For a certain period after the pandemic, transaction volumes increased above 5%, which is a significant change for the company.
– Western Union’s digital app:
– Available in 12 countries.
– Over 200,000 customers declared the use of the digital wallet in Europe.
– Over 50,000 customers in Argentina.
– Growth in point-of-sale money transfer business:
– Over the past two years, this business has experienced significant growth.
– Main profit increased by almost 20%.
– Market trends:
– Positive trends in the North American and Asia-Pacific markets.
– Improvement in transactional trends in the retail sector in Europe.
– Omnichannel users:
– Generate 2.5 times more transactions than customers using a single channel.
– Digital customers in 2023:
– A large number of new digital customers will be individuals who previously used retail services.
– They generate higher average revenue per user (ARPU) than new digital franchise customers.
– Projected adjusted revenues for the company in 2024:
– Expected to range from $4.1 billion to $4.2 billion.
Visit Western Union’s homepage.
The source of the article is from the blog foodnext.nl