What would happen if Western Union started operating as a Bitcoin exchange?
Cryptocurrency
Asked by Question Bot09/Sep/20151 answer
1 Answer
F
Faisal Khan
Answered 09/Sep/2015
Why would they? Western Union is in the business of moving money, not of becoming an exchange. An exchange does not move money, unless you make the effort of moving money in/out from the exchange or move your bitcoins in/out from the exchange.
I doubt their business would increase by being just an exchange, they could however benefit from the transfers of Bitcoins in/out from their retail locations, however, that would be far fetched as they are not licensed to do this, nor are the laws clear about it.
WU does have a digital unit, and its struggling. WU's traditional remittances have been on a climb, but their stock has been taking a hammering for the past 5 years (down 14% over the last 5 years, whilst S&P 500 has climbed 88%)
The digital unit was to achieve US$ 500 Million in revenue, but struggled to do so $200 Million and is being investigated by the SEC.
WU has a pre-fund model, so even by adopting more powerful payment rails like Stella or Ripple, they will just decrease the requirement for liquidity (which is provided by Agents anyways), but it won't do them much good.
Internet based sale, pre-paid cards and other competitors have been aiming to hit WU where it hurts (traditional remittances), but the company still has the lion's share of remittances (of the $400 Billion moved last year, WU did 20% of that, amounting to $82 Billion in over 259 Million transactions). This yields an average transaction price of: $316.00
In the instant transaction space, WU is king and will remain so for a while because of their brand. WU's new CFO Raj Agrawal is all poised to make sure WU is not left standing because of complacency and embraces the digital alternatives, channels and rails for its money-moving business.
If WU were to have an exchange themselves, they would have it predominantly for purposes of access to liquidity, nothing more.
Source: Western Union Probed by SEC Over Digital Revenue Reports
I doubt their business would increase by being just an exchange, they could however benefit from the transfers of Bitcoins in/out from their retail locations, however, that would be far fetched as they are not licensed to do this, nor are the laws clear about it.
WU does have a digital unit, and its struggling. WU's traditional remittances have been on a climb, but their stock has been taking a hammering for the past 5 years (down 14% over the last 5 years, whilst S&P 500 has climbed 88%)
The digital unit was to achieve US$ 500 Million in revenue, but struggled to do so $200 Million and is being investigated by the SEC.
WU has a pre-fund model, so even by adopting more powerful payment rails like Stella or Ripple, they will just decrease the requirement for liquidity (which is provided by Agents anyways), but it won't do them much good.
Internet based sale, pre-paid cards and other competitors have been aiming to hit WU where it hurts (traditional remittances), but the company still has the lion's share of remittances (of the $400 Billion moved last year, WU did 20% of that, amounting to $82 Billion in over 259 Million transactions). This yields an average transaction price of: $316.00
In the instant transaction space, WU is king and will remain so for a while because of their brand. WU's new CFO Raj Agrawal is all poised to make sure WU is not left standing because of complacency and embraces the digital alternatives, channels and rails for its money-moving business.
If WU were to have an exchange themselves, they would have it predominantly for purposes of access to liquidity, nothing more.
Source: Western Union Probed by SEC Over Digital Revenue Reports