Thought Leaders in Mobile and Social: Interview with Nick LeCuyer, VP of Strategy and Distribution at Western Union Digital (Part 2)

Sramana Mitra: Then there is international money transfer. There are all sorts of mobile payment technologies happening. Could you talk a bit more about these developments, how you process these trends, and what decisions you are taking in the domain of mobile payment?

Nick LeCuyer: In terms of financial services, mobile is highly diverse. That reflects ambitions of different companies and also different market contexts. A consumer in Uganda is going to have a very different set of devices and technology available to him than a consumer in San Francisco. Being a global company, we have to deal with that full range of diversity. We are trying to meet customer needs. We want our customers to be able to use their mobile devices to send and receive money. That means different things in different markets. Just to give you a sense of this diversity, I will start with the San Francisco version. Many consumers in the U.S. already have smartphones, for example. Smartphone penetration is past the 50% mark. We see the same trend with our core consumers. The ability to enable one of our customers to make a money transfer right from their smartphone is a huge convenience for that customer. A consumer can download our app, log on, set up a profile and send a money transfer anywhere in the world.

SM: Is this a consumer-to-consumer money transfer?

NL: Yes.

SM: Maybe it would be a good idea to set the business context of what Western Union does and what the different types of consumers are that you touch.

NL: If I look at the company overall, we are a leader in global payment services operating under the Western Union brand as a flagship. The core of the business, from a revenue and transaction perspective, is consumer-to-consumer money transfer. In 2012 the company processed 231 million consumer-to-consumer transactions globally, which accounted for $79 billion. We also did quite a bit of business payments as well – either B2B or B2C. But from a revenue perspective, over 80% of the company’s revenue consists of consumer-t0-consumer money transfers.

SM: And you take your transaction fee for that. That is your business model.

NL: That is correct. Typically the revenue model is based primarily on a fee charged to the sender. In some cases where there is a cross-currency transaction there may be a modest foreign exchange spread as well. What consumers are using our service for is to send and receive money on a global basis. One use case might be a sender in the U.S. – perhaps someone who emigrated from Asia, who works as a nurse and is a first or second generation immigrant and might have family members back home. Whether it may be routine family support on a monthly basis, a special occasion or something else, Western Union is a great way for them to support family members – to send money back home and make sure they are taken care of.

This segment is part 2 in the series : Thought Leaders in Mobile and Social: Interview with Nick LeCuyer, VP of Strategy and Distribution at Western Union Digital
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