Western Union are aiming to increase their reach to over one million locations within the next few years and the key method they intend to use in order to achieve this is implementing a range of prepaid debit cards.
Western Union are one of the most widely recognized global payment service provider and last month they celebrate the opening of their 500,000th location.
The latest reports suggest that they have a number of partnerships in the pipeline with traditional banks which could see their overall presence spiral upwards at an astonishing rate.
Hikmet Ersek, president and chief executive officer (CEO) of Western Union outlined his intent in a recent press release, stating that
Our vision is to establish one million Western Union touch points.
Ersek then went on to say that,
In every corner of the globe where anyone, anywhere can send a money transfer, pay bills, obtain and reload a prepaid card or pick up funds sent through a Western Union yellow phone or the Internet. We believe access to financial services is not a luxury, it’s a necessity.
A recent Dow Jones report indicated that WesternUnion already earns approximately 1 percent of the company’s annual revenue from prepaid debit cards which were launched in 2010. This is seen by many industry experts as a tester program launched by Western Union to determine how prepaid credit cards operated by the company would be received by consumers.
However, Mr. Ersek has confirmed with Dow Jones that he is currently taking into consideration whether or not he is willing to issue co-branded prepaid cards featuring the name of the partner bank as he moves ahead with his plans to diversify Western Union’s interests into the prepaid market.
However, he remained somewhat reluctant to either confirm or deny whether or not the recent agreement which Western Union struck with Sun Trust Banks would lead to cards of this nature. However, he was happy to confirm that the Sun Trust deal will result in additional locations in the Western Union network of agent branches in a move which looks set to further blur the boundary between traditional banking services and retail cash payment service providers.
Western Union first introduced their money transfer service in 1871 at which time the company provided their core services by way of telegraph communications across the United States. However, as first telephones and then the internet began to replace wire communications, the focus was shifted to specialize in providing services to the under-banked and under-served communities.
It has been suggested by a number of Dow ones analysts that Western Union will be able to use their brand recognition across the world to launch a very strong prepaid card sector within the company, even more so now that thy appear to have backing from a number of mainstream, and well respected banking institutions.
Western Union have traditionally marketed themselves to low income households who are in search of alternative financial solutions which makes them a perfect fit for prepaid debit cards since they are also primarily marketed to this group of people. In fact, prepaid cards are beginning to become popular among other consumers too as they give a better level of control of spending habits than a traditional credit card.
American consumers are currently expected to load $353.8 billion onto prepaid cards in the coming year which makes it no surprise that Western Union are set to become the latest company to jump on the band wagon. It certainly looks o be a profitable venture for WesternUnion if all goes according to plan.