Western Union experiences repercussions due to suspension from operations in Russia during Q2 2022
Western Union's Q2 2022 Performance: Mixed Results Amidst Market Challenges
Western Union, a leading global remittance company, has reported its Q2 2022 financial results, revealing a mixed performance marked by challenges in core remittance markets but growth in non-core segments and digital initiatives.
The company's total revenue decreased by 4% to $1.03 billion, with adjusted revenue down 1% excluding Iraq. This decline was primarily due to a slowdown in the North American retail business and losses in Iraq, partially offset by growth in Branded Digital and Consumer Services, which grew 41% adjusted.
Geographically, North America accounted for 39% of consumer money transfer revenues but declined 11% year-over-year. On the other hand, regions like the EU and CIS experienced 6% growth. However, other key markets including MEASA, LACA, APAC, and the Middle East and South Africa showed declines.
The share of consumer payments through digital means remained at 25%, while digital revenues shrank by 6%. Notably, digital money transfers, representing 25% of total consumer revenues and 33% of total transactions, also decreased by 6%.
Despite the ongoing economic slowdown, Western Union has not seen a notable change in average amounts sent by customers. The company is optimistic about an increase over time.
In response to these challenges, Western Union is re-allocating funds to North American marketing efforts to acquire more omnichannel customers. The company is also investing in improving the onboarding experience and retention-impacting features on the Western Union Digital App.
Moreover, Western Union is planning a revenue growth strategy focused on customer acquisition, particularly on the digital side. The company is also investing in a wallet-based digital banking platform in Europe and building on the success of its exclusively branded locations in Brazil, with pilots beginning in Europe.
Western Union has again downgraded its projections for FY22, expecting GAAP revenue to reduce 11-13%, compared to the previous projection of a 9-11% reduction in Q1.
While detailed comparable data for other global remittance players' Q2 2022 performance was not found, Western Union’s performance reflects common industry challenges of macroeconomic pressures and market disruptions, with companies diversifying revenue streams and expanding digital offerings to maintain growth. This trend is also observed among leading global remittance firms, indicating a shift towards technology and services to offset traditional remittance market declines.
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