For Western Union, the world's largest money transfer company, focusing on under-banked populations is a core part of its strategy and India, the world's largest market for inbound remittances, could emerge as an important market for its value-added services, Stewart Stockdale tells Kanika Datta on his first visit to the country. Edited excerpts:
Where does India figure in your global operations?
About 85 per cent of Western Union's business is consumer money movement across borders and in some markets, we have domestic money transfers. We operate in 200 countries and have 455,000 agent locations, which makes us the leading money transfer company by location points in the world. India is the world's largest inbound market, and it is mostly a receive market. It is our largest market in terms of number of locations at 71,000.
And, in terms of value?
Mexico. That's historically been our biggest market because of the US-Mexico relationship. But no country represents more than six per cent, the US being the biggest market in general.
But the business in India is basic compared to what you offer elsewhere.
Today it is. But we are exploring opportunities and that's why I'm here. Today, we are very big in cash-to-cash. What we are looking at is creating send-and-receive markets where you have cash, a bank account or even mobile on the send side and the same thing on the receive side.
Our other big business is payments, not in all markets but in the US, Argentina, Brazil and Panama. People put the money in our system and we settle with the biller literally the same day. In many markets we have a competitive advantage because those payments are not received on a same-day basis, it could be three to five days.
Another very important part of our global strategy is our pre-paid card. In most markets the average consumer is not being included in the financial system from a payments perspective. The card will be Western Union branded, but in partnership with Visa or Mastercard. We have a great advantage because over time those 455,000 locations will be converted into top-up locations so that you can load money on to the card. We send billions of dollars to markets so we can offer consumers the option of receiving money on a card or a mobile phone.
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What is great about the payment device is that once the money arrives it gets consumers added flexibility of how to use it. They could buy something online or just store it.
Why hasn't this been introduced in India yet?
We are evaluating the opportunity. We have introduced it in the US and will do so later this year in the Philippines, Central America, Jamaica and Mexico. We are really excited about the opportunities to bring consumers into financial inclusion and India is really a perfect market for that. But there is the question of regulation and how to work with our partners.
Have events in West Asia impacted your business, since it is a big remittance market?
There was a diminution of the business in North Africa because of Egypt, Libya and Ivory Coast. We will see dips based on different economies, but West Asia is still robust for us, especially Saudi and UAE.
How has the Indian market done?
India continues to grow. We don't disclose market-by-market numbers because we are publicly traded. We think we have more share to gain here based on the $55 million that comes in by creating a product eco-system. For example, in the Philippines, we offer a card to seafarers. If they have, say, a family member going to the US to study, they can put money on a card and use it.
But you can do that with an ordinary credit card.
Credit-card holders are not our typical customer. What percentage of the population in India is banked? It is about 45 per cent, so, 55 per cent is not. That is a huge number. And if you look at the migrants who are sending money home, they are very much an underserved population. So, we are not going to compete with the traditional big banks. In most parts of the world, we are going to focus on that underserved population as a core part of our business.
In India, there is a very interesting thing that is developing, which is the banking correspondents concept. So, you can link the distribution and start doing transfers through that network. We are closely looking at it and exploring a lot of partnerships in that area.
