Quarterly Earnings Review for Western Union, Ria, and MoneyGram in 2020's Third Quarter
In the rapidly evolving world of finance, two major players - Western Union and MoneyGram - are seeing significant growth in their digital arms, while their traditional cash-to-cash segments are declining. This trend is also true for Ria, another prominent player in the global payments sector.
The shift towards digital services is evident, with year-on-year increases of 45%, 95%, and 126% respectively for Western Union, MoneyGram, and Ria. This growth is primarily driven by an increase in customer behaviour shifting towards digital services during the pandemic.
For these companies, digital typically means debit card pay-ins and cash pay-outs. This transformation is not just limited to the payments sector, as supermarkets like Kroger are opening up their locations to competition, a move that signifies the decreasing exclusivity in the industry.
The growth in digital revenue is holding up for both companies, with less pricing pressure than may be expected. One of the reasons for this could be the increased competition in the supermarket super-agent segment, as seen with Walmart's decline in business for Ria.
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The countries primarily responsible for the increase in digital customers of Western Union, MoneyGram, and Ria are the United States, India, Mexico, and the Philippines. A large portion of these new digital customers are coming from banks and smaller traditional cash-based players.
Western Union claims that 80% of its digital customers are new to the company, and MoneyGram sees similar numbers. This suggests that the digital transformation is not just about retaining existing customers, but also about attracting new ones.
However, the World Bank's latest forecasts for the sector may not paint a completely positive picture for the future. As with any industry undergoing significant change, there are challenges to be navigated. But for now, it's clear that the digital revolution is transforming the payments sector, and companies like Western Union, MoneyGram, and Ria are at the forefront of this change.
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