Western Union Bolsters P2P Payments Operations

With its peer-to-peer electronic transfers business expanding online, Western Union is now partnering with banks around the world to send account based money transfers.

Western Union is known primarily for its cash transfer services, but with the payments market rapidly becoming more digitized the company is expanding its turf in the growing P2P market, and the move is already paying dividends. The company has taken a two-fold approach towards electronic P2P payments by offering such payments via their own website and mobile app, while also expanding an initiative to the U.S. to partner with banks to offer account-based money transfers anywhere in the world.

The main drive behind these two approaches is to make transfers easier and more convenient for Western Union customers, says Khalid Fellahi, senior vice president and general manager of Wester Union Digital Ventures. "Many [customers] don't want to go to a location to make a transfer, they want electronic service," he remarks.

Fellahi says that a year ago Western Union was seeing single-digit growth in its electronic transfers from its website. The company decided to revamp their website and offer new online and mobile services. The changes helped the company achieve 35 percent growth in these electronic transfers in 2011, while also attracting many new customers to Western Union. "80 percent of the westernunion.com transfers are from newly-enrolled customers," Fellahi notes. "We are seeing new customer segments, and new use cases." Western Union is now moving $80 billion in peer-to-peer payments and transfers, according to Fellahi.

Western Union also partners with banks around the world to offer account-based money transfers. Most of the partner banks in the U.S. tend to be regional banks like US Bank and Regions Bank; in total Western Union has 90 participating banks around the world. Many of the banks have a widget or space in their online or mobile channels that users can click on to initiate a transfer with Western Union, Fellahi says. Customers can also initiate transfers in the branch; in Japan customers even initiate transfers from ATM's , Fellahi adds. This, he comments, gives the customer the ability to make transfers to accounts anywhere in the world from a familiar environment - their bank.

Fellahi says that the goal is to achieve seamless interaction for customers between their bank and Western Union. The company maintains an open system with published API's for the banks to develop to integrate with their own infrastructure. Fellahi says that Western Union can help participating banks with this solution and can also help the banks deal with regulations affecting payments sent to almost any country in the world. "We do payments in 135 countries and compliance in more than 200 jurisdictions," he points out. "We cover the universe when it comes to anti-laundering and compliance."

The account based transfers service gives banks a chance to increase customer loyalty, Fellahi suggests. Customers will be able to rely on their bank for sending money almost anywhere quickly and conveniently. "Not many companies can offer payments and transfers anywhere in the world," he says.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio