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Western Union Spins International Financial Web

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Western Union Spins International Financial Web


Western Union Spins International Financial Web

Western Union Spins International Financial Web

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
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Immigrants, legal and illegal, send billions of dollars home using money transfer companies such as Western Union. So do criminal enterprises, such as human and drug traffickers. Western Union has evolved from a company delivering telegrams to one based on international money transfers.


The flow of suspected terror financing is part of a much larger flood of legitimate money from the United States. Immigrants come here from all over the world and send money home. That's become a big source of income for a company that seems to belong in a different. It's the company that once built a telegraph line that linked New York to California. Now it transmits money to small villages in Asia, Africa, and Latin America.

NPR's Ted Robbins reports on the transformation of Western Union.

TED ROBBINS: How many ways can you say, send money?

Unidentified Man #1: (Spanish spoken)

Unidentified Woman: (Foreign language spoken)

Unidentified Man #2: (Foreign language spoken)

ROBBINS: These days, Western Union delivers it in more than 200 countries. It's not the only money transfer service but it's three times larger than its nearest competitor. Western Union has about a quarter of a million agents worldwide.

Mr. PATRICK DORSEY (Stock Analyst, Morningstar Company) That huge network really is their primary competitive advantage.

ROBBINS: Patrick Dorsey is a stock analyst with Morningstar. He's bullish on the company. He owns stock in it himself.

Mr. DORSEY: You can send money not only from, say, Chicago to a small town in Mexico. But at this point, because Western Union is actually opening agents in most post offices across China, someone who has emigrated from rural China to Shinzen or Shanghai can send money back home as well. Someone from Dubai who is an Indian guest worker can send money back home to a small town in India.

(Soundbite of laughter)

ROBBINS: It's payday and people are in line at the customer service counter of a supermarket in Tucson. They're buying lottery tickets, cashing checks, and sending money home. A woman picks up a Western Union form, fills it out, and gives $600 to the cashier. The cashier transmits the form, and in minutes the woman's family can pick up the money at another Western Union agent.

Unidentified Man #3: Can you tell me what country you're sending.

Unidentified Woman #2: Guatemala.

Unidentified Man #3: Oh, Guatemala.

Unidentified Woman #2: Uh-huh.

Unidentified Man #3: And can you tell me your name.

Unidentified Woman #2: No - I - no.

ROBBINS: She may be concerned about giving her name because of her immigration status, but she's not shy about why she's here.

Unidentified Woman #2: I have accounts in other banks, three banks. One, Bank of America, Compass Bank; but they do not offer the convenience of this to send the money.

ROBBINS: At least not on the sending end.

Ms. SHERRY JOHNSON (Spokesperson, Western Union): Western Union's customers aren't necessarily the un-banked.

ROBBINS: Western Union spokesperson Sherry Johnson.

Ms. JOHNSON: But the family that they're sending funds to back home may not have a similar banking relationship.

ROBBINS: In developing countries, recipients may have no choice and it's not cheap. The average amount Western Union transfers is about $300, to send that it charges almost $30, 10 percent of the total. To Mexico, where lots of other companies offer similar services, it's less - $16. Morningstar analyst Patrick Dorsey says customers are willing to pay the price.

Mr. DORSEY: This is money that they're using for housing, for shelter, money that they wouldn't have had otherwise. And the sender is likely making a much higher income than they would in a home country. What that fee does is insures reliability.

ROBBINS: And it's actually cheaper than the fee many banks charge.

Like any financial institution, Western Union attracts shady customers, scam artists, smugglers, even one of the 9/11 terrorists have used Western Union. The state of New York fined the company for lax reporting procedures. The state of Arizona regularly seizes money it says goes to pay human smugglers. The company is now in court to limit those seizures. But Patrick Dorsey says those are just blips; the overall business reflects an unstoppable trend.

Mr. DORSEY: As long as you have individuals in one part of the world making more money than individuals in another part of the world and maintaining social and ethnic ties and wanting to remit money back to the folks - the place where they came from, there will be a demand for this service.

(Soundbite of cash register)

ROBBINS: The service is the flip side of immigration: People move one way to work, and they use Western Union to send their earnings home.

Ted Robbins, NPR News.


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