Western Union released fourth quarter results that showed continued momentum in digital transactions, up double digit percentages year over year.
Consolidated revenue for the period was $1.3 billion, up 2% year-over-year, measured in constant currencies.
Economic headwinds persist, however. Fourth-quarter revenue was driven by growth in digital money transfers and the Business Solutions segment, partially offset by a decline in retail money transfers, the company said in its statement.
Additional documents released by the company show that consumer-to-consumer (C2C) revenue was flat in constant currency at $1.1 billion, while transactions were also flat in the quarter at around 78. 3 million transactions.
Revenue from digital money transfers grew 13% on a reported basis, or 12% at constant currency, and accounted for 24% and 37% of total C2C revenue and transactions, respectively. Digital currency transactions grew 17% year over year.
In the C2C segment, the company said principal per transaction was $341, up 14% year-over-year.
Westernunion.com revenue increased 9% at both reported and constant currencies, including cross-border revenue growth of 12%. Additionally, business solutions revenue grew 22% year-over-year to $109.2 million.
CEO Devin B. McGranahan – who took over the company earlier this year – said on the analyst conference call that “the digital business has driven strong growth while our retail has declined due to an uneven economic recovery negatively impacting our customers.”
He noted that “Labour force participation is an important driver of our retail business. And while there has been a slight improvement in labor force participation, we remain below the pre-pandemic trend.
Digital growth will slow on difficult components
But, as he said later on the call, “We believe demand for our core assets and capabilities will increase.”
Chief Financial Officer Raj Agrawal said on the conference call that Westernunion.com’s cross-border revenue grew 12% year-over-year.
Nodding to the Business Solutions segment, Agrawal said revenue growth was driven by improving international trade, as well as increased activity in the education and financial institutions sectors.
Agrawal said looking forward, “we expect growth to be better in the second half” across retail and digital channels. The first quarter of this year will likely mark the weakest growth for digital, in part due to tough comps – and where the segment grew more than 40% last year in the first quarter.
McGranahan said that “there is a strong correlation that I’m starting to see between our digital business and our retail business. … A high percentage of our transactions that begin digitally end in a withdrawal somewhere in the world.
The digital banking initiative in Europe and multi-currency payment wallets represent significant digital opportunities, he added. Regarding the potential of digital, he noted that the segment accounted for 24% of C2C revenue in the last quarter, up from the middle of the previous year.