Western Union (NYSE:WU) is having a tough year with sentiment firmly against its ability to maintain dominance of international money transfers in the face of competition from more nimble digital players.
The shares are down 21% year-to-date and 30% in the past 12 months at the current price. Yet its 18-year streak of dividend payments is intact and its financials are in line with expectations. The stock yields a high 11.1% at the current price of US $8.62, indicating investors believe a dividend cut may be coming.
The company is the largest money transfer company in the world, operating in over 200 countries and territories, in 130 currencies. It handled over 300 million transactions in 2024.
Its first quarter, earnings met analyst forecasts. Revenue declined 3.3% to $984 million, while earnings per share of $0.41 were flat.
Western Union is responding to the challenges of cellphone and internet transfers at cheaper prices by investing in its digital transfer platforms.
It has formed a partnership with Canadian fintech ZÅ«m Rails to use the Interac banking system to send money from Canada to over 200 countries. This helps it compete on speed and convenience.
It has introduced a free-free first transfer in some markets and is experimenting with tiered pricing to attract cost-conscious users. Western Union’s app has been enhanced and supports digital wallets, trackable transfers, and multiple currencies to match the user experience of fintech competitors.
The company believes these measures will take time to yield results. In the meantime, Western Union continues to reward investors. In addition to its dividend, it has announced a $1 billion stock repurchase program.
This article appeared in a recent issue of the Income Investor.  For information on how to reprint this article please view this page.
Adam Mayers 
0 comments on “Western Union adapts to low cost competitors”