Western Union Mobile Payments / Digital Transactions Quantity Spikes in First Quarter

May 9, 2019         By: Steven Anderson

The recent word out of Western Union’s earnings call, which emerged only recently, gave us an ultimately mixed bag of information. While it missed estimates out of Wall Street, it did have one bang-up year in the part of things we pay the most attention to: the digital payments side.

In fact, digital payments for Western Union were up fully 19 percent in the first quarter, as westernunion.com saw substantial growth in usage. Those gains, however, weren’t enough to turn away some significant troubles in the currency field—as well as some softening in the international payments field as well—and left Western Union with total generally accepted accounting principles (GAAP) earnings per share (EPS) of $0.39. All the estimates were targeting $0.43, which may not sound like much, but in aggregate is bigger than you’d think.

Western Union also landed some solid revenue figures, at $1.4 billion, but that was still down 3.6 percent over the same time last year. That also missed consensus estimates by the comparatively small sum of around $20 million. However, if the same currency values from last year were used, reports suggest revenues would actually be up two percent.

Breaking down the results, Western Union noted that consumer-to-consumer revenues were down three percent, but would have been largely unchanged if the currency values had held. Additionally, transactions were up two percent, and cross-border operations were up five percent. Its online operations proved to be a big part of the company’s revenues; westernunion.com represented 13 percent of the company’s consumer-to-consumer revenues.

What this proves more than anything else is that, even in times of uncertainty and wild currency fluctuations, mobile payments can still shine through as a powerhouse. It’s a safe bet that, if Western Union didn’t have that consumer-to-consumer digital payments business, its results would have been even worse than they were now for the loss. Sure, some of the losses can be attributed to things beyond Western Union’s control, but without that digital payments traffic, a down report might well have been a bloodbath instead.

Once again we see the power of mobile payments to give businesses of all sizes a leg up. Whether it’s someone selling handicrafts on Etsy or a major multinational corporation, mobile payments are an option worth having.