Western Union is ideal for small cash remittances. But it’s expensive.
|Transfer speed:||1–3 days|
|Trustpilot score:||4 stars|
|Our score:||2 stars|
What we like
- Flexible delivery methods, such as cash pickup
- Large network of agents all over the world
- Funds were available almost instantly
What we don’t
- Low value transfer limits
- Poor reputation for customer service
Western Union basically invented money transfer, and is by far the largest company of its type in the world. For over 100 years, millions of customers have relied on its services to move money to friends and family around the world.
Despite the company’s massive payment network, the landscape of international money transfer is quickly changing with technology advancement. While there are still many living without formal banking infrastructure, as each year passes by, Western Union is closer to disruption by its younger and more nimble competitors.
Western Union claims to be one of the easiest ways for families, friends and businesses to send money around the world. To learn more about their capability, and to see if their service is right for you, read on for my in-depth review of Western Union.
Western Union was founded by Ezra Cornell in 1851, originally as a service for exchanging telegrams. (For you younger readers out there, telegrams were how people sent short messages across long distances before the advent of telephones). Over time, the company expanded their services to allow customers to make in-person transfers through its retail locations, and then eventually online also.
The telegram aspect of Western Union’s business was discontinued in 2006, however, money transfer services are very much a core unit of the company’s operation. Western Union is by far the largest provider of money remittance services in the world, transferring over $300 billion on behalf of its customers in 2017 alone. It is much larger than even its closest competitor, MoneyGram, who by comparison is estimated to transfer $25 million annually.
Western Union is currently lead by Hikmet Ersek as CEO. He is supported by Raj Agrawal who acts as Chief Financial Officer, and by Odilon Almeida who is President of the Global Money Transfer business unit. Sheri Rhodes oversees all technical aspect of the company as Chief Technology, while Caroline Tsai is the group’s General Counsel. Jacqueline Molnar rounds out the executive team of note, as Chief Compliance Officer.
The Western Union Company
12500 East Belford Avenue
Englewood, CO 80112
Western Union supports the transfer of 130 currencies, leading to a total servicing of over 200 countries. To support this extensive reach, the company has established a network of bank accounts, using a combination of international banking partners, as well its own locally based subsidiaries. In addition to bank transfer, the company can also deliver funds by other methods such as:
- Cash pick up
- Mobile money
Western Union does not have a minimum transfer value. While the company is equipped to complete transfers of varying sizes, its online platform is limited to a maximum transfer amount of £4,000. For residents of the United Kingdom completing bank to bank transfer, it is possible to complete transfers of up to £50,000. For any values larger than this, you will need to approach one of Western Union’s retail stores directly to arrange an in-person transfer.
Exchange rates and fees
Before committing to using a currency transfer service, it’s important to understand its business model. Put simply, a company like Western Union typically generates revenue in two ways. Firstly, it may charge a transaction fee for executing each transfer. Secondly, it may also take a margin on the exchange rate provided to its customers, also known as the “spread”; which is the difference between the exchange rate of the wholesale market (i.e. the interbank rate), and the exchange rate offered to the customer.
When comparing the pricing of Western Union against traditional banks, the company fares slightly better. Banks typically charge a large transaction fee and a 5% margin on the total value of the transfer. Western Union, on the other hand, charges a small flat fee of only €2.90. The exchange rates are marginally more competitive than the banks, leading to the total cost of a transfer amounting to approximately 4.65% of the total amount transferred for small values (€250), and 3.58% for larger values (€5,000).
When comparing Western Union to other specialised currency transfer services, it does not stack up very well at all. While currency services such as TransferWise and CurrencyFair do not take a margin on the value of the transfer, and rather they provide their customers with the mid-market rate, they do charge a larger fee to compensate; amounting to approximately 0.50% of the transfer value. Unfortunately, these alternatives can’t always send funds to all corners of the globe and by a variety of methods, which is one of Western Union’s primary strengths.
As an example, let’s compare Western Union against its competitors when exchanging Euro (EUR) into Australian Dollars (AUD):
|wdt_ID||Service||€ 250||€ 1,000||€ 5,000||Ave. cost||Review|
While there may be some benefits to using Western Union, its certain is expensive. However, its ability to provide payments to hundreds of countries and by a variety of methods, it does have its uses. Nevertheless, it is very unlikely to offer competitive exchange rates when compared to other similar remittance services out there, such as WorldRemit and TransferGo.
The speed of Western Union’s services vary greatly depending on the method of delivery selected. Transfers initiated via cash pickup and mobile money are completed almost instantly. While bank transfers usually take between 1 – 3 business days to be fulfilled.
What are the key features of Western Union’s online platform? Let’s take a look at the various payment services offered by the company.
A spot contract consists of a single payment from one currency to another at the currently available exchange rate. If you need to send money right away, simply log in to the Western Union website, and with a couple of clicks, a transfer can be arranged. Unfortunately, at this stage, this is the only type of payment that Western Union can facilitate. As a result, anything resembling the more advanced features offered by other currency transfer services, such as scheduled payments or conditional orders, are not possible.
Western Union’s strengths lay in its ability to transfer funds in a variety of customer-friendly ways. In this spirit, the company has established relationships with over 500,000 cash pickup locations in 200 countries. This large network of retail agents allow in-person transactions and provide flexibility into areas of the world with limited banking infrastructure.
In addition to WesternUnion’s headquarters in the United States, the company has many international offices; so many in fact, that there are almost too many to list. These administrative hubs are supported by the company’s network of agents, which consist company owned stores as well as authorised third-parties. As outlined earlier, there are over 500,000 of these located around the world. Their locations can be found on Western Union’s website. For transactions occurring online, the company’s customer service team can be contacted by phone or email.
1800 173 833 (AU)
+44 808 234 9168 (UK)
+1 800 325 6000 (US)
In my experience, I found the Western Union customer service staff to be friendly and helpful. I did not have to wait too long to speak with someone on the phone, and my queries by email have been answered in a prompt and professional manner.
Security and regulation
Is Western Union safe? Let’s take a look at the various initiatives adopted by the company to ensure the security of its customers.
As Western Union is headquartered in United States, the company is regulated by FinCEN. Western Union’s international subsidiaries are also regulated by the relevant authorities in the jurisdiction of their operations, such as the FCA in the United Kingdom and ASIC in Australia.
Customer funds held in trust
In accordance with the standards imposed by government regulators, the funds of Western Union’s customers are held in segregated accounts and are therefore kept completely separate from the company’s own operating accounts. This ensures the security of customer funds, should Western Union encounter financial difficulties.
The Western Union website is protected with TLS encryption, which prevents sensitive data from being intercepted during your visit. You can confirm that this is in place by recognising a green padlock next to the website’s URL on your browser.
Can you trust Western Union? Let’s take a look at look at some of the key factors which affect the company’s reputation.
As of publication, Western Union has received 12,659 reviews on Trustpilot with an average rating of 4 out of 5 stars; representing a positive experience in 88 percent of interactions with its customers.
Here are some of my observations on the feedback posted:
- Convenient delivery methods
- Funds are received quickly
- Retail stores are helpful
- Accounts suspended or banned without explanation
- High overall cost for using the service
- Using the online platform is frustrating and inconsistent
In a strange move, Western Union have decided not to provide feedback to their customers on the Trustpilot. I can’t help but think this is an indication of their general attitude to customer service. Not a good sign, if you ask me. Or perhaps its just too much effort?
Upon viewing the Facebook and Twitter feeds of Western Union, we can see a range of varied interactions between the company’s customer service staff and its customers. As Western Union is very much a consumer level operation, they respond to many queries per day. Unlike their Trustpilot account, responses on Facebook and Twitter appear to be prompt and helpful. Additionally, the company has quite an active presence in posting general cultural news, aimed to engage their followers.
Hello, Steven, thank you for contacting us. Please send us a direct message for further assistance. We’ll be glad to help you. https://t.co/qKjoigB5WzWestern Union (@WesternUnion) June 25, 2018
As for the mainstream media, their reporting on Western Union has generally been sparse but positive. As much of Western Union’s business is conducted at their retail stores, much of the reporting by media outlets surround the company’s plans on expansion into new markets, new partnerships, and acquisitions.
Western Union is the gorilla of money transfers, handling close to $1 in every $5 that is wired around the world.The Economist
Western Union Empire Moves Migrant Cash Home.New York Times
Western Union built its business on refugees and immigrants. Can it survive the political backlash against them?Bloomberg Businessweek
The Western Union website has been designed thoughtfully, with special attention being paid to user experience and simplicity. In addition to its online platform, Western Union has also developed mobile apps for both Apple and Android devices.
The sign-up process is relatively straight-forward. You begin by entering your name, date of birth, email and a password. Then you must enter additional personal information such as address. The entire process takes around 10 minutes.
Before you are able to commence transferring funds, you first need to provide proof of identification so Western Union can verify your account. Two documents are required; one proving your identity, such as a passport or drivers licence, and one proving your address, such as a bank or utility statement.
How does Western Union work?
To familiarise you with the Western Union service, I’ll take you through a transaction I completed with them recently. If you need some guidance in navigating your own account, you can follow along below.
Visit westernunion.com and log in. Once you have entered the Western Union website, you are greeted with a relatively minimal interface. To begin a transaction, select the denomination of the currencies which you intend to transfer and click Start New Transfer.
Select the country of your recipient, the value of your transfer in either the sending or receiving currency denomination. Then select how you would like the payment to be received and the method in which you would like to pay. If you wish to pay by debit or credit card, this is the fastest method of transferring funds to Western Union. Other payment methods can also be selected, including bank transfer.
You can then add the specific information of your intended recipient. If you selected bank deposit as the method of delivery, as I have, now is the time to enter the recipient’s bank details.
If you chose to pay by debit/credit card in the previous screen, now is the time to enter the relevant details. A summary of the quoted transaction is provided for your review. Once you are sure you want to confirm and proceed with the transaction, click Accept. Once your transaction is confirmed, it is time for Western Union to get to work and begin processing your payment.
Once your funds have been received by Western Union, they will finalise the transfer to your recipient. You can track your transfer online or with their mobile app. Additionally, throughout the process, you will be provided with email updates as the payment moves within the system.
Finally, once the transfer has been completed, its status will be updated accordingly and the payment will be reflected in your recipient’s account shortly.
In my experience, the Western Union online platform was simple to use, despite the interface being a little simplistic, and I was satisfied with the updates provided to me along the way. The entire process took 2 business days, and the funds arrived into my recipient account as requested.
Western Union is the largest money transfer service in the world, but it is in no way the best. While it certainly does have large payment network – which is helpful to its users – this comes at a great cost. The exchange rates offered by Western Union are poor, an essentially amount to a tax of a sort on its customer who don’t know any better. While the company has maintained this business model for sometime, I can’t help but think that its days are numbered.
As an online platform, Western Union is a basic service. Expensive, and with low maximum transfer limits, money transfers with Western Union. With a number of new services putting customers first and foremost, such as WorldRemit or TransferGo, its hard to justify using Western Union any longer. And if you are making transfers between larger nations, you might even consider technology-first companies, such as TransferWise or CurrencyFair. Although my experience with Western Union was acceptable, I’d suggest looking for a better deal if you can.
If you have any questions or feedback, let me know in the comments below.