In a continuous effort to grow its mobile money transfer business, world's leading money transfer company Western Union Co. (NYSE: WU) has entered into a partnership with Paga, a leading independent payment processor in Nigeria. Paga has tie ups with all mobile networks in the country and offers easy, fast and safe mobile banking services to its current base of 1.2 million users.
Through this deal, Paga users will now be able to receive a Western Union Money Transfer transaction directly into their Paga account. Using Paga's multi-channel platform, consumers will now have the option to obtain the money by sending it to a bank account, withdrawing from an ATM, or through Paga's network of over 4,000 agents in Nigeria.
The deal complements Western Union's retail agent network of over 500,000 locations globally, of which 4900 locations are based in Nigeria alone.
Western Union perceives Nigeria as an attractive market. The country had more than $21 billion in migrant remittance inflows in 2012, which constituted approximately 9% of the nation's gross domestic product. The company introduced its mobile money transfer in Nigeria last year by signing a deal with eTranzact.
Money transfer services through electronic channels, which include online, account based, and mobile money transfers, taken together constituted approximately 5% of U.S. consolidated revenues for the year ended Dec 31, 2013.
Mobile money transfer has increased over the recent past owing to its round-the-clock accessibility. Money transfer providers deem the mobile platform as a key element within their business strategy – as one that offers their customers choice as well as convenience. Likewise, this service is expected to witness a faster adoption rate than any other electronic channel.
Western Union is aggressively expanding its mobile money transfer network across the globe. It currently has 20 active partners around the world with mobile money transfer services now available in 18 countries. Through the mobile platform, Western Union allows its users in these countries to transfer money to and from a mobile wallet or bank account.
Western Union is intent on growing its mobile payment channel of business (SMS and mobile web, as well as walk-in, phone and online payment services), since it foresees tremendous growth in this particular line of money transfer service.
The company has also been adding several mobile applications to enhance convenience for its customers.
Western Union currently retains a Zacks Rank #3 (Hold).
Other players providing similar money transfer facilities are Visa Inc. (NYSE: V), Moneygram International Inc. (NYSE: MGI) and Euronet Worldwide Inc. (NASDAQ: EEFT).
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