Western Union is seeking to enter into the intra-money transfer business in India, in addition to growing its network beyond 60,000 locations across the nation. Growing its electronic channel is one of its top priorities, Hikmet Ersek, who assumed charge as the chief executive officer of Western Union on September 1, told Sumit Sharma in an interview. Edited excerpts:
What are your key priorities as the new chief executive of Western Union globally?
Growing our cash-to-cash business is one of the first priorities. We had some slowdown in this. Global transactions in the last quarter grew nine per cent. There is room for expanding the network. In the US, we have 50,000 locations with 350 million people. In India with 1.2 billion people, we have 60,000 locations. So, there is room to grow. Growing electronic channels is one of my highest priorities. Mobile channel and business-to-business payments are our other priorities. There’s a belief that the cash-to-cash business is old fashioned. I want to deny that. We have 420,000 locations worldwide. Nobody can connect so many dots as we do.
Your business helps you get the best feel of the global economic environment. What’s your assessment of the global economy?
We are present in 200 countries and have a portfolio which responds to both risks and opportunities. We see in some parts of the world it’s improving, while in some parts of the world it’s still challenging. Even in Europe, in Spain it’s still challenging, while other parts like Germany, France and the UK are holding pretty well.
We see some challenges in the Gulf, which impacts the Indian market. We see improvement in our US business. It clearly depends on the area. I don’t see a general global improvement.
Would you like to specify areas which are yet to recover from the slowdown?
Countries like Turkey, Egypt and BRIC (Brazil, Russia India and China) nations are coming very strong. Turkey used to be an inbound country but given the current environment, it has become an outbound country. Countries like Malaysia, Indonesia are growing pretty strong. In central Europe, Germany and France are doing pretty well.
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Banks in India are embarking on a massive financial inclusion plan, which will include reaching the doorstep of even the poorest. How do you see that affecting your business?
That’s a huge opportunity for Western Union. We are obviously not going to compete with the local banks because they are our partners. If you have a savings bank account in a village in Bihar and want to send money into it from Denver, US, it will be difficult to do so. Banks in Bihar or in India would need a company like Western Union to do the account-based money transfer. We are partnering with microfinance companies to reach to more people with financial needs and that’s part of our social responsibility. I intend to have more partnerships like that.
Can you share your plans for India over three to five years?
I would like to expand our agent network from 60,000. Every time I visit India, I feel annoyed we are not present in every village. We are in 7,000 cities, towns and villages. We want to expand the network. Second, we want to be able to send money to India electronically. The India diaspora living abroad needs to send money to their loved ones. Third, we are looking at an opportunity to grow into intra-money transfer.
Do you see a shift in revenues coming from different countries?
None of the countries are bigger than six per cent of our revenue, which is great being a global company. India and China contribute about seven per cent of total Western Union revenue. Despite the challenge we face in the Gulf to India, we are very satisfied with our Indian business.
In the increasingly security conscious world, what are the main challenges faced by Western Union?
We are always aware of our anti-money laundering programme and security. No company invests more in anti-money laundering yearly as we do. We spend about $30-$40 million (Rs 140-186 crore) in a year. We are very conscious that every transaction should be filtered and we work together with governments.
It’s one of our biggest assets and I see it as a competitive advantage against others. We would like to see our product portfolio expand in India and China into intra-money transfer business, when regulations allow us and we are working closely with the Reserve Bank of India.
