Monday, March 07, 2011

Western Union's mobile remittances strategy

It often happens that one is confronted by another Western Union press release regarding mobile money. (Like for instance this one). Quite a lot are being said about turning Western Union service into a mobile enabled service. Even if one visits the official Western Union website, one can find a mobile money fact sheet (with very little effort). (Read here).

It may not be commonly known, but Western Union started out as a telegraph company more than 150 years ago. This service was provided to loyal customers till as recent as 2006, when the "Telegram and Commercial Messaging services" were officially discontinued. By this time, almost all revenue was being generated from the remittance service started in 1871. (It only became the biggest generator of revenue in 1980 when it surpassed telegram revenue!)

It seems that this organisation is capable of re-inventing itself to remain relevant in a changing world. Their mobile initiative is (in my mind) a very clever strategy because of two reasons: a)They have shown that they can re-invent themselves b)They have the tools to ensure that they remain relevant in this new world of mobile payment remittances.

All mobile remittances consist of two legs: The "send leg" and the "receive leg". It is extremely difficult (as a matter of fact impossible) to change one of these legs into a mobile wallet without considerations of the other leg. Because Western Union controls many of the existing points of presence in these legs for cash transactions, they are able to activate true mobile remittances much more effectively than others. This is a classic case of developing a strategy based on your strengths to ensure that you remain relevant in future.

1 comment:

Frans said...

Like most things in life,... adapt or die. One needs to be able to adapt in order to survive or grow.