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Western Union Resumes Digital Revenue Upsurge in Q3 of 2023

Despite anticipated overall decrease in 2023 for Western Union, Q3 of the same year saw encouraging developments, such as a resurgence in digital revenue growth.

Western Union's digital revenue growth resumes in the third quarter of 2023
Western Union's digital revenue growth resumes in the third quarter of 2023

Western Union Resumes Digital Revenue Upsurge in Q3 of 2023

Western Union, a global leader in cross-border payments, has reported a return to digital revenue growth in Q3 2023. This marks the first time since Q1 2022 that the company has seen such growth.

The digital rebound was primarily driven by a 9% increase in branded digital transactions and a 6% increase in branded digital revenue. This growth was fueled by factors such as the acquisition of EuroChange and strong European travel activity, which boosted the Consumer Services segment.

Despite challenges like geopolitical headwinds in the Americas retail business and a decline in the Consumer Money Transfer (CMT) segment, the positive momentum in the branded digital business contributed to overall revenue resilience. The digital segment’s growth helped partially offset a 3% decline in total consumer money transfer transactions and a decrease in cross-border principal revenue in some other areas.

Western Union's adjusted earnings per share reported at $0.42 in the quarter, exceeding some analyst expectations and providing a foundation for optimism about the company’s transition strategy toward digital remittances and travel money services.

The company's adjusted EBITDA growth was flat to Q3, at $261.5 million. However, the adjusted operating margin for Western Union declined by 100 bps to 19.6% in Q3.

Western Union's revenue growth includes a 7% adjustment, excluding the contribution from Western Union’s recently sold Business Solutions segment. Notable contributors to this growth include Argentinian inflation, which contributed three percentage points to Western Union’s revenue growth in Q3, and a change in Iraq’s monetary policy that led to a wave of money transfers in Q3.

The news article, authored by Joe Baker, offers free access to a comprehensive range of research and analysis on cross-border payments globally. Users can create a free account to access the article's content, and the industry-leading newsletter is also available.

Despite the positive news, it's worth noting that share prices decreased following the call. Joe Baker, who is mentioned to have a LinkedIn profile, did not provide any new factual information about Western Union's financial metrics or digital revenue growth beyond what has been reported in this article.

[1] Source: Western Union Q3 2023 Earnings Release [4] Source: Western Union Q3 2023 Investor Presentation [5] Source: Western Union Q3 2023 Earnings Call Transcript

The digital growth of Western Union, observed in Q3 2023, was predominantly due to a rise in branded digital transactions and an increase in branded digital revenue, both amounting to 9% and 6% respectively. This development was facilitated by factors such as the acquisition of EuroChange and robust European travel activity, which positively impacted the Consumer Services segment within the company's business.

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