Western Union Digital Ventures
Khalid Fellahi, Senior Vice President, Western Union Digital
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Western Union Today
2011 revenue: $5.5B
C2C overwhelmingly cash to cash
C2B: 12% Other: 2%
C2C: 84%
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Our Strengths
Global brand and customers
Agent network and partners
Technology
Financial strength
Compliance and regulatory
capabilities
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Approximately 70 million money-transfer senders
Our Customers
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Agent Location Growth
1996 2001 86,000 120,000 2006 200,000 2011 485,000
Agent Partner Network
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Financial Strength
+
Strong balance sheet and cash flow+
A- credit rating+
Access to trading lines and ability to source multiple currencies+
Compliance and regulatory capabilities=
Ample access to capital=
Commitment to business growth and product investment7
Higher Net Worth
Underserved 700-900M 650-850M Unbanked 800M-1B 1.5-2.5B Extreme Unbanked
Meeting the Needs of 2 Billion Underserved
SOURCE: McKinsey & Co., “Half the World is Unbanked”, October 2009; CGAP, “Financial Access” 2009; C.K. Prahalad, “Fortune at the Bottom of the Pyramid” 2004; Hammond et all, “Purchasing Power at the Bottom of the Pyramid” , 2007; World Bank 2009 Bottom of the Pyramid population, Company analysis
….and providing financial services to those without access to traditional banking services
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Key Strategic Growth Areas
Global Consumer Financial Services
Ventures
Business Solutions
Money transfer, bill pay
Cross-border business payments
New products, services and electronic channels
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WU Ventures
Digital Ventures
(Digital, Mobile – Channel)
Send/Receive (beyond retail) Spend (beyond cash) Monetize (Attachment rev) 1 2 3
Stored Value Ventures
(Card, Mobile, Digital – Product Access)
Data Ventures
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Stored Value Ventures
•
Product and geographic expansion
• A leading global reload/cash access network
• Offer new ways for customers to access stored value
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Develop robust consumer database
Retention
Loyalty
Targeted offerings
As database evolves, expand
beyond money movement to
meet customers’ financial needs
Western Union customerbase underserved beyond money movement
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Western Union Digital
Online Money Transfer
Mobile Transaction
Services
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Online Money Transfer
Originating business
in 23 countries
$100M+ revenue 2011
Strong margins
Growth accelerating from
single digit to 35% in 2011
Investment focus
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Leveraging Our Assets
Virtually all cash payout
485,000 locations
Brand recognition 82% globally;*
strong trust in the brand
Risk mitigation, compliance
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Growing Market Opportunity
Low single-digit online market-share
Channel adoption growth
New customer segments
Smartphone adoption
Remittance growth & beyond
remittance use cases
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Key Developments
Smartphone access
New service: bank payout
San Francisco WU Labs
Platform migration
Rethink customer experience
Transaction funding
WU Pay
Revenue
Growth
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Key Developments
Smartphone access
Launched in May 2011 in U.S. iPhone, Android, BlackBerry Good ramp-up
10% of online C2C transactions in U.S.
Higher share of wallet Expanding to new
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Key Developments
New service for bank account payout
Launched in December 2011 in U.S. Recently expanded to U.K., Australia Payout to banks in 38 countries
Ramping up
90% new customers/use case Expanding to new payout
geographies
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Key Developments
San Francisco WU Labs
Established base in September 2011
Digital product and business development
Relocating key competencies Hiring new breed of talent
Expanding operation and technology capabilities
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Key Developments
Platform migration
Moving to e-wallet based platform Rebuilding all layers
Agile, faster development for new products
New Pay In / Pay Out architecture Innovation
Foundational capabilities, then roll out globally
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Key Developments
Rethink customer experience
New voice and tone
New design, fast/easy transaction Universal account
Mobile at the center of innovation Foundational capabilities, then
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Key Developments
Transaction funding
Account funding (low cost) Most popular pay-in options Special debit card features
Expanding options based on geographical adoption
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Key Developments
Launched proprietary alternative
payment method
Acquired startup eBillme Bank push / cash
Portfolio of gift card & merchant for e-commerce
Activating in the U.S., selected geographical expansion
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Investing for Growth
Stepping up investment ($35M)
Technology, products Talent
Marketing
Geographical expansion
Accelerated site traffic, customer conversion
Growing customer base (1 M+ active today) Rolling 12 months, 80% of new online
customers new to WU franchise
Transaction per customer (+8% YoY in 2011)
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Western Union Digital
Online Money Transfer
Mobile Transaction
Services
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Strategy
Partnering with banks, Mobile Network Operators (MNOs) or independents to enable mobile-based transactions
Western Union on Mobile Banking
Western Union on Mobile Wallet
Service banked consumers using mobile channel
Expansion in line with ABMT/ multi-channel strategies
Example: ABSA Bank South Africa
Partner with MNOs
Primary focus unbanked consumers Reach underserved receivers
Example: Safaricom/M-PESA Kenya mobile users
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Competitive Advantages
re
ce
iv
e
s
e
nd
Global and strong brand recognition Global network, multichannel
Global AML/compliance engine & expertise Global settlement & FX system
Standard gateway & vendor programs GSMA endorsement
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Competitive Advantages
Sender uses mobile wallet as source of funds. Receiver payout in cash, mobile, or bank channels.
Mobile Send
Mobile Receive
Funds directed by Sender (push or alternatively by the Receiver (pull) to the wallet or account
1.
2.
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Continue to expand MNO* Relationships & maintain leadership
120 + initiatives globally (GSMA) Approximately 30 partners for WU (multiple geographies)
10+ operations live
Established brand and presence Early stages, 3-5 year opportunity
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Western Union Digital Summary
Leveraging Western Union strengths
Growing market
Enhancing capabilities
Strong partnerships
Goal of $500M+ digital
revenue by 2015
Thank you
Questions?
Khalid Fellahi Senior Vice President, Western Union Digital
