FIS Announces Deal With Western Union on Remittance Service
"FIS is excited to offer Western Union's global money transfer service to our financial institution clients, adding strategic value to a bank's portfolio of services and convenience to consumers," said Anthony Ficarra, executive vice president, FIS eBusiness. "We see Western Union as a strong and strategic fit in providing our clients and their customers with the convenience of a well-established and strong Western Union agent network to easily transfer money to family and friends."
Once an FIS client agrees to offer Western Union's services, the financial institution will be connected to more than 334,000 Western Union agent locations worldwide, enabling banked consumers to send money transfers in the U.S. and around the globe.
The services will include money sent to individuals as well as money sent from account to account.
Ficarra said the new Western Union services will be available to credit unions that process their cards with the company as well as those that use its core processing system. He also said the services would not come at a special price to credit unions-yet.
"I think we will have to see what the volumes look like to see if there can't be a different negotiation on prices," Ficarra said, "but it's certainly possible."
What the new systems will allow, Ficarra said, is the income stream that Western Union wire transfer remittances carry. The business is extremely lucrative and has helped the company earn $1.2 billion in the first three months of 2009 and increase its profits by 8%.
According to the FDIC, wire transfer companies such as Western Union and MoneyGram are among the largest beneficiaries of these financial flows and associated fees.
Western Union has 6,000 offices throughout Mexico, according to the agency, including branches in post offices. The two companies controlled 40% of remittance transactions from the United States to Mexico several years ago; however, because of increasing competition from other wire transfer companies and, to a lesser extent competition from banks and credit unions, their market share has dropped to 15%, the FDIC said. The competition has reduced the cost considerably, from 15% of the amount remitted in the late 1990s to an average of 7.32% in early 2004, the agency noted.
The World Council of Credit Unions, which administers the IRnet declined to comment on the news about FIS and Western Union. The international organization already works with VIGO Remittance Corp., a subsidiary of Western Union, for its remittance services to Latin America.