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Cross Border Payments through Collaboration

February, 2020

Sohini Rajola, Head of Network – APAC and Middle East, Western Union shares her opinions on leveraging technology, strategy and collaboration to combine the physical and digital world of payments to create value for customers.

The Government of India has envisioned a target of attaining a $5 trillion economy by 2024-25. In your opinion, what are some of the policy measures that are needed to attain this target?

First of all, I think it is a very ambitious goal both for economic levels of performance as well for human development. If we are able to get to that level of performance, in terms of economic goals for the country, it will be great for entire human development index of the country. In terms of what would be needed to actually to get there, I think one of the key things, apart from major investments and policy measures, we should also focusing on both attracting and retaining the right type of talent. This is because when people talk about economic development, and there is a whole lot of focus on infrastructure, investments but talent gets left behind sometimes. In the increasingly digital era, it will be extremely critical and crucial to focus on not just the development of right kinds of skills that are needed domestically, but also on how India can also be a part of the global economy. At Western Union, we believe in connecting and building bridges. We operate through 200 countries and corridors. And we have seen, in every example, that when there is interconnectedness in development on both sides. So I do hope that focus on attracting, retaining and developing talent both for domestic as well as the global needs of the new economy, should be something which would go a long way towards attaining this ambitious goal.

What are some of Western Union’s focus areas globally? Please elaborate on how this connects with your growth strategy.

At Western Union, our mission has always been to offer our customers, whether it is consumers or businesses, more and more avenues to both send and receive money globally in a seamless manner. I would say there are two focus areas for us. First, is our omni-channel strategy. We have always believed and heavily invested in ensuring that everything that we do is truly inclusive in nature. We offer our digital platform in more than 75 countries, mobile app in 44 countries, and we have access to billions of bank accounts, wallets, etc. Our strategy is omni-channel because we want to connect the physical and the digital, and we are in a unique position to be able to do that. That inclusive growth is what will give the momentum to get to the next level of development.

The other focus area for us is to open our cross-border platform and capabilities to other brands who want to move money globally and have access to our cutting-edge technology, our settlement systems, our network, and our compliance capabilities. Because, when you are doing business cross-border, it is really important that every transaction, which is subject to multitude of regulations, is as per the regulations of both sending and receiving country. So, globally there are many brands who want to have access to this. In the past, we were very focused on just furthering the Western Union brand. But, recently we have embarked on the strategy of opening up our cross-border platform. And it is really interesting because we have companies such as Kenya’s Safari Com, Korea’s KEB Hana Bank, Saudi Arabia’s Saudi Telecom, etc. who have all moved their cross border businesses on the Western Union platform. So at the backend it is the Western Union platform that is running. These brands, because they are very strong locally, have an appeal and a customer base in their areas of operations. They offer it as a service which is powered by Western Union. So, collaborating with other companies and opening up our platform to them is also a key part of our strategy going forward.

The other key and very unique example of a partnership where we are opening up our network, not just our settlement capabilities but also our cash collection network across the world, is our tie up with Amazon. So as Amazon, world’s largest digital retailer, was finding it difficult to cater to a large number of people, who wanted to buy global or online but they wanted to pay via local currency or in physical cash. But today, Amazon in a large number of countries is able to offer this service through their partnership with Western Union. You might think that this service is restricted for some Asian or Latin American country, but you would be surprised to know that we also offer this service in US. And it is picking up very fast. There are customers within the United States who want to shop on Amazon, but they want to pay via physical means or by going to their neighbourhood Western Union location. We are able to combine the physical and the digital world and there is value in that.

You have recently launched, a new digital touch-point for customers. How does this platform tie in with your core service offering?

We are really excited about launch of in partnership with Yes Bank. It is the next step for our presence in India. We have been serving customers here for more than 25 years and primarily we were able to offer our services to a large number of customers who were receiving money. India as you know is the top recipient of global remittances and Western Union plays a key role in being able to offer its network of physical locations to facilitate inward remittances from around 200 countries for Indians. The partnership to launch now opens up our digital platform and our collaboration capabilities for Indians who want to send money online. The customer will be able to pull money from his bank account and send money in real-time to a large number of countries. So yes, we are very excited about this next step in our service offerings for the Indian customers.

The direct-to-bank business coming into India has significantly increased over the years. Do you anticipate that the outward business at could also significantly scale up for you going forward?

Absolutely. Typically, when you think of cross border, you only think about Indians going abroad and sending money back home, but we fail to realise that there is a very large population of Indians who are now sending money overseas and it is not a bad thing. It is important because when there is an Indian citizen who is going overseas, whether it is for travel or whether it is for education, there is a huge probability that they are going to either send back money or they are going to also invest and be participating in this whole growth story. So, the business itself is growing.

How do you plan to build competitive advantage against fintechs that are operating within your domain?

We are constantly evolving our capabilities to be able to offer to the customers what they truly care about. In the consumer-to-consumer space, what matters to customers is trust, reliability, flexibility and the right price at the right time. A software engineer sitting in San Francisco, while having his dinner wants to use his mobile app to send money, but his mom in Vijayawada wants to be able to go the neighbourhood post office and be able to speak to somebody and get her money in cash. We should be able to provide that entire seamless experience. I think we welcome competition because competition is good. It also has the potential to foster collaboration and that we have always seen at Western Union that it leads to 2 things, better outcomes for the customer and more inclusive growth.

What is your strategy for deepening the remittance business in India and what is your opinion on the whole philosophy of migrating from cash to digital? How is this influencing your business?

At Western Union, we have always been both supporters and admirers of the way the technology and the payment systems in India have evolved. India is amongst the first countries to offer the real time payment services, and it has been a big boon because of the time zone differences. Earlier, the time it would take between sending money and receiving money, particularly to bank accounts, was significant. So at Western Union, we have done two things. One, we believe in bringing the best of our technology and systems for the benefit of the Indian consumer, and also riding on some of the key technology developments and the payment system innovations that are happening in country to be able to further improve our services. One of the key examples of that is Western Union being the first cross border money transfer operator to offer cross border transactions on UPI. We recently announced that customers do not need to remember the IFSC or the bank account number when they are sending money to bank accounts. They can simply use UPI, which I would say is  a revolutionary payment system innovation, and Western Union has enabled it in partnership with Yes Bank for our customers overseas.

So, in this whole journey of both moving towards digitization yet ensuring that the customer who still wants to have his access to cash, for whatever be the reasons that they have, Western Union wants to serve both ends of the spectrum. As we increasingly bring our digital services, we also make it easy for the customer. We in fact help them through this journey of transitioning from cash to digital. So, hopefully as the India growth story continues, Western Union will continue to be a part of it.