2Semana
I worked there until around 2017, before I started my own business :-) . The CEO at the time was Hikmet Ersek, an Austrian of Turkish descent, who also helped establish the Western Union International Bank in Vienna.
By the way, there’s also competitive pressure coming from a completely different direction: https://orf.at/stories/3440268/
By the way, there’s also competitive pressure coming from a completely different direction: https://orf.at/stories/3440268/
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2Semana
@burnheart What do you think of WU? Do you see any opportunities there?
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2Semana
@Part_Time_Joe I think your AI-generated text is raising hopes in the wrong direction. At least, I see it as much more sobering:
As for WU’s digital transformation into a neobank, you can find more here -> https://www.westernunion.com/de/de/digitalbanking.html So that story has completely failed.
What remains is a focus on the core business of “money transfer,” which can also be done via an app instead of physically visiting a branch. This digital business is growing (at the expense of the legacy business) and has lower costs, but it also comes with lower margins and stiffer competition.
At the same time, the traditional core business with the branches is shrinking. In addition, there are other potential problem areas and risks (the Intermex acquisition, interest expense, etc.).
It’s no coincidence that the company was punished so severely. In my view, the real question now is whether the traditional “money transfer” business will remain profitable for longer than the market expects—not whether WU will transform itself into a kind of fintech company. But that alone is probably enough to justify an upside in the valuation. A short-term prerequisite is the success of the Intermex acquisition.
It’s actually a real shame because the huge branch network provided a solid moat and the foundation for additional products. But these efforts were likely made too late, out of necessity. It wouldn’t be my investment case ;-)
As for WU’s digital transformation into a neobank, you can find more here -> https://www.westernunion.com/de/de/digitalbanking.html So that story has completely failed.
What remains is a focus on the core business of “money transfer,” which can also be done via an app instead of physically visiting a branch. This digital business is growing (at the expense of the legacy business) and has lower costs, but it also comes with lower margins and stiffer competition.
At the same time, the traditional core business with the branches is shrinking. In addition, there are other potential problem areas and risks (the Intermex acquisition, interest expense, etc.).
It’s no coincidence that the company was punished so severely. In my view, the real question now is whether the traditional “money transfer” business will remain profitable for longer than the market expects—not whether WU will transform itself into a kind of fintech company. But that alone is probably enough to justify an upside in the valuation. A short-term prerequisite is the success of the Intermex acquisition.
It’s actually a real shame because the huge branch network provided a solid moat and the foundation for additional products. But these efforts were likely made too late, out of necessity. It wouldn’t be my investment case ;-)
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2Semana
@burnheart Did I ever write in my text that the goal of digital transformation is to become a neobank? ;)
Basically, though, I agree with you. Western Union needs to succeed in a) expanding its traditional retail business through the Intermax acquisition and making it more profitable by leveraging synergies, while at the same time continuing to drive its digital transformation forward.
I’m sure they’ll succeed. After all, the business model doesn’t have to work for the next 100 years to justify the valuation. Five years is enough! … and it certainly will!
Basically, though, I agree with you. Western Union needs to succeed in a) expanding its traditional retail business through the Intermax acquisition and making it more profitable by leveraging synergies, while at the same time continuing to drive its digital transformation forward.
I’m sure they’ll succeed. After all, the business model doesn’t have to work for the next 100 years to justify the valuation. Five years is enough! … and it certainly will!
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