Western Union signals Neobank’s big ambitions

In one fell swoop, Western Union could become the biggest neobank of them all – and its reach already reaches around 150 million customers in 200 countries.

Europe could be ground zero for the company’s digital banking push.

As reported on Tuesday, the money transfer juggernaut is partnering with Marqeta, the card-issuing platform that integrates its offerings into Western Union’s digital banking platform. The partnership allows Western Union to issue virtual and physical Visa cards to be used for remittances.

In terms of mechanics, the announcement brings together Marqeta’s open application programming interface (API) card issuance platform while allowing Western Union to manage workflow with real-time information. on card activity.

Also read: Marqeta partners with Western Union for digital banking in Europe

Notably, the statement detailing the joint efforts between the two companies notes that Marqeta’s platform gives Western Union the ability to add new features over time.

And so, it’s the platform model that provides some scalability and gives Western Union some dry powder in its bid to build consumer loyalty for a range of banking services.

Why Europa? Not surprisingly, this is a significant market for Western Union, accounting for 29% of consumer-to-consumer revenue, as shown in the revenue supplements to the latest quarterly report. Management said in earnings calls late last year that there are plans to pilot – through Western Union International Bank – a WU-branded solution in a few European countries.

This offer would work as a multi-currency bank account, debit card and integrated money transfer solution. And in a commentary on the big picture, then-CEO Hikmet Ersek said that “we are a trusted supplier to a large, unique customer segment, the global migrant community, which has many needs beyond money transfer, such as insurance, loans and travel.”

Go digital, globally

We note that growing connectivity in Europe, and indeed, worldwide, underpins the ability for Western Union (and other companies) to offer a wide range of banking services, done digitally, to a wide range of consumers. For a few anecdotal examples, consider recent findings from Benchmarking the World’s Digital Transformation, a collaboration between PYMNTS and Stripe.

Also read: How the world is going digital: Digital transformation is only 27% of its full potential

Surveys in 11 countries have found that countries including Germany and France are only reaching around 25% of their “full” digital potential, yet connectivity, depending on where you look, is high. Between 80% and more than 90% of the adult population of these countries is connected to the Internet and roughly proportionally shares their own smartphones.

Having the hardware and software in hand, quite literally, means consumers across the continent would be able to more fully embrace digital banking, as cards are connected to digital payments. And that means Western Union, with its 19th century roots, is becoming a 21st century banking giant.

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NEW PYMNTS DATA: THE CUSTOM PURCHASING EXPERIENCE STUDY – MAY 2022

About: PYMNTS’ survey of 2,094 consumers for The Tailored Shopping Experience report, a collaboration with Elastic Path, shows where merchants are succeeding and where they need to up their game to deliver a personalized shopping experience.

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