Hampered early on by Covid-19, The Western Union Co. late Wednesday said its growing digital-transfer business helped buoy its results for the fourth quarter and the full year. Overall, revenue from digital transfers, including activity on Westernunion.com, grew 36% in the fourth quarter year-over-year and accounted for just over one-fifth of total consumer-to-consumer revenue, the company reported. At the same time, the digital activity provided nearly one-third of consumer transactions.
The digital activity amounted to record highs in both transactions and revenue for a quarter, Western Union said. The company did not break out absolute figures. By itself, the Web site saw its count of average monthly active customers balloon 49% in the quarter compared to the same period in in 2019 as consumers flocked to the Internet for domestic and cross-border money transfers.
Executives at the Denver-based company underscored the fast-growing importance of its digital business in the face of the ongoing pandemic. “As we begin 2021, uncertainty remains elevated, but we are optimistic that business will continue to improve gradually, with expectations that our digital revenues will reach approximately $1 billion in 2021,” said Hikmet Ersek, president and chief executive, in a statement.
Overall, consumer-to-consumer transfers in the quarter increased 6% year-over-year to 78.4 million, though the year’s total of 290.5 million was flat compared to the total for 2019, indicating the channel picked up momentum in the second half of 2020 after sustaining quarterly drops in the first half of the year, when the pandemic first took hold.
Western Union’s $1-billion goal for its digital service comes as newer firms like Remitly and TransferWise are growing fast with digital transfers, notes Robert Napoli, an analyst at Chicago-based William Blair & Co. At the same time, Western Union in January reached an agreement with Walmart to offer domestic and cross-border transactions at 4,700 stores.
For the quarter, the Denver-based company reported $1.27 billion in revenue, down 3% year-over-year. Revenue for the year totaled $4.84 billion, down 9% from 2019. The consumer-to-consumer business accounts for about 87% of total revenue.