Western Union Signs Turkish Bank – Analyst Blog

The world’s leading money transfer company, Western Union Co. (WU), yesterday announced that it has tied up with a leading Turkish bank, Yapi Kredi. As a result of the pact, Western Union will now be able to offer money transfer services via all the 830 branches that span the country.

 

Currently, Western Union has a distribution network of 4,700 locations in 81 cities in Turkey. The accord with Yapi Kredi will provide Western Union access to a ready customer base of 6 million. 

 

The Western Union network functions in the form of “direct to bank” and “account to cash”. Its “direct to bank” service enables a consumer to send a transaction from an agent location directly to a bank account in another country. Its “account to cash” allows consumers to debit their bank accounts and send the money through Western Union to be paid at an agent location.

 

Western Union is aggressively partnering with banks across the globe to increase its network. During February, the company announced that it has entered into an agreement with four Chinese banks – the Bank of Jilin, Fugan Hashi Bank, Bank of Harbin , Fujian Haixia Bank and Zhejiang Chouzhou Commercial Bank – to provide the money transfer service. This is in addition to the existing bank agents – The Postal Savings Bank of China , with whom the company renewed the money transfer agreement in November 2009, the Agricultural Bank of China and China Everbright Bank.

 

During April, Western Union announced the roll-out completion of its global money transfer service at more than 1,300 Fifth Third Bancorp (FITB) banking center locations in 12 states in North America.

 

Last month, Western Union announced that it will offer its money transfer service through The Philippine National Bank, Philippines’ largest offshore bank network.

 

Turkey is a Eurasian region that Western Union is very optimistic about with respect to long term growth prospects. Though the European region experienced an overall weakness in 2009, markets are gradually stabilizing. Remittance data from Asian countries such as the Philippines, Pakistan, Bangladesh, China and India continues to remain solid. Further, the company is poised to benefit from the improving global economy.

 

Last month, Western Union announced organizational changes designed to reduce management layering within the organization. This restructuring bodes well for the company and is expected to result in annual savings of $50 million by 2012, adding 80−90 basis points to the margin.