Western Union beats as more people use Web, mobile money transfer
By Neha Dimri
(Reuters) - Western Union Co (WU.N: Quote), the world's largest money-transfer company, reported a better-than-expected quarterly profit as lower prices drew more customers, particularly to its digital money transfer business.
Revenue at the company's digital business, which includes westernunion.com and mobile money transfer, jumped 21 percent in the third quarter, accounting for nearly 6 percent of total revenue.
Western Union has cut prices and invested heavily in its online and mobile businesses to better compete with fast-growing rivals such as MoneyGram International Inc (MGI.O: Quote), Xoom Corp XOOM.O and privately owned Boom Financial Inc.
The move is starting to pay off as the company has been eating into the market share of online rivals such as Xoom, by offering highly competitive foreign exchange rates and lower transaction fees.
The company said on Thursday it plans to increase its spending on digital and mobile business, compliance and cyber security in the fourth quarter.
"Our previous pricing and other strategic actions in Europe and in Russia have helped drive good results," Chief Executive Hikmet Ersek said on a post-earnings conference call.
Growth in transactions in Europe and Russia, which account for more than a fifth of Western Union's total revenue, rose 10 percent during the quarter.
"We believe market has shown fairly stable pricing recently," Chief Financial Officer Raj Agrawal said, adding that the company expects pricing actions to be modest for the remainder of the year. Continued...