One of the most common questions asked at industry conferences is why
Western Union or
Moneygram don’t just use Bitcoin themselves. If they did, they could eliminate the potential threat posed by the young Bitcoin remittance start-ups who are out there trying to eat their lunch.
Theoretically, Western Union could just throw R&D resources
at the problem and come up with a large-scale version of what companies like Bitspark in Hong Kong, Payphil in South Korea, or BitPesa in Kenya have been working on for the last three years.
The short answer is that
Western Union doesn’t need Bitcoin in its current infantile state. Conversely, if and when Bitcoin reaches adulthood the world would no longer need Western Union.
Prehistoric animals
The Colorado-based giant is often compared with prehistoric animals by the Bitcoin community and although a little harsh, it’s not an altogether unfair characterization when you consider how long it’s been around.
The Western Union empire is all of 165 years old and has been transferring money domestically within the United States since the 1870s. Their early dominance involved leveraging their nationwide telegraph monopoly to send remittance instructions from city to city in much the same way we use payment APIs today.
Today their network includes over 500,000 physical outlets spread across 200 countries, which facilitated
over 261 mln consumer-to-consumer transactions in 2015. On the technology front, the $10 bln company was the first to launch its own set of geostationary satellites, dubbed Westar, as far back as the mid-1970s to facilitate its own internal communications.
More recently, its WUConnect platform allows social media and mobile messaging users to send money from within the user interfaces of their favorite apps, including Viber and WeChat.
Western Union on Viber
In a one-off experiment, the author requested $20 from a friend in San Francisco using the Viber app.
Unfortunately, there was both a $4 service fee plus a 4 percent forex hidden fee in the currency conversion to Philippine pesos. By the time the author had actually received the pesos from a local Western Union agent in Metro Manila, $24 had been reduced to less than $19.15, a loss of nearly $5.