Western Union wants to grow its footprint to more than a million locations over the next few years, and the company thinks a line of prepaid debit cards can help achieve that goal. The global payment services provider celebrated the opening of its 500,000th agent location in April, and news reports indicate that upcoming partnerships with traditional banks could expand the company's presence quickly.
Western Union President and CEO Hikmet Ersek explained his intentions in a statement to reporters. "Our vision is to establish one million Western Union touch points," Ersek said. "In every corner of the globe where anyone, anywhere can send a money transfer, pay bills, obtain and reload a prepaid card or pick up funds sent through a Western Union yellow phone or the Internet. We believe access to financial services is not a luxury, it's a necessity."
According to a Dow Jones report, Western Union earns 1 percent of its annual revenue from prepaid debit cards it launched in 2010. However, Eskin told Dow Jones that he may consider a partnership to co-brand Western Union debit cards with the name of a partner bank. Eskin wouldn't confirm whether his company's recent agreement with SunTrust Banks would lead to such an arrangement. However, the SunTrust deal will add that company's locations to its network of agent branches, further blurring the lines between traditional banking and retail cash payment services.
Western Union introduced money transfer services in 1871, when the company's core service provided telegraph communications across the country. As telephones and Internet access mostly replaced wire communications, Western Union shifted its focus to providing financial products to "underbanked" and underserved consumers. Analysts contacted by Dow Jones suggested that Western Union's brand familiarity could help it grow a strong prepaid debit card business, especially with the backing of mainstream banks.