Western Union stores join MoneyGram under Walmart’s roof

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The pandemic has made for strange bedfellows. Case in point: Western Union and MoneyGram will soon share Walmart as a landlord.

Western Union and Walmart announced an agreement Tuesday that will introduce Western Union’s money transfer services at Walmart stores, where Walmart’s longtime remittance partner MoneyGram recently renewed its own deal.

For Western Union, this decision is a strong push to recapture the walk-in traffic it lost during the coronavirus pandemic, which drove large numbers of consumers to seek out digital alternatives to walk-in money transfer agents.

The move also creates significant duplication of the two remittance specialists’ services. This may not be much of an issue if the rumors that Western Union might acquire MoneyGram turn out to be true. MoneyGram has been up for sale before; in 2018, Ant Group’s Alipay tried to buy MoneyGram, but the deal fell apart after pushback from the U.S. government.

Western Union will provide local and international money transfer services along with bill payments and money orders to Walmart customers beginning this spring. Western Union promises payouts “in minutes” to more than 550,000 retail locations, along with billions of consumer bank accounts, digital wallets and cards around the world, the companies said.

The news drove a brief stock rally on Tuesday for the Denver-based Western Union, whose walk-in traffic for outbound remittances slowed last year as the pandemic took hold.

“Adding the footprint of Walmart to its U.S. operations should help Western Union to improve its consumer-to-consumer results in North America, which have been an intermittent source of weakness for some time,” said Mark Palmer, managing director and fintech analyst at BTIG, a New York-based investment firm, said Tuesday in a note to investors.

MoneyGram, which also experienced lower foot traffic in 2020, has had a presence in Walmart stores for years. In October, MoneyGram renewed its contract for three additional years. A MoneyGram spokesperson said there are no changes to that deal, which expires in 2024.

MoneyGram, which is based in Dallas, powers the white-label Walmart2World service available at its 4,700 stores, as well as a cobranded digital remittance platform enabling users to initiate and receive funds through mobile and online channels.

In April of 2020, MoneyGram’s digital transactions grew 81% year over year, putting the company on a path to see more than a third of all transactions flowing through its digital platform.

Western Union and MoneyGram overlap in various ways; MoneyGram reaches more than 200 countries and territories, and its digital platform enables nearly instant transfers to more than 75 countries.

Both remittance companies are fighting to expand their share of digital remittances against a rising tide of digital money transfer providers including TranferWise, Remitly, WorldRemit and Xoom (a unit of PayPal).

By hosting both remittance companies, Walmart, the nation’s largest retailer with 4,700 locations, seemingly gains the advantage of expanded pricing and transmission options for consumers. Western Union also may improve its competitive horizon by matching MoneyGram’s access to Walmart’s large walk-in traffic.


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