Last November Western Union announced it had completed the acquisition of Travelex Global Business Payments and according to Raj Agrawal, president of Western Union Business Solutions the newly merged company is now better able to serve the large – and growing – cross-border business-to-business market globally.
We also have longer working hours than the banks in Malta, which for business clients is naturally a big benefit
In an interview with The Times Business Mr Agrawal says Travelex Global Business Payments and Western Union Business Solutions is the largest non-bank provider of cross border business payments in the world.
“The revenue for SME payments alone is estimated at around $24 billion, and we are well placed to compete with the big banks for market share,” he says.
“The Western Union Company is dedicated to serving the underserved. That is our mission as an organisation and it runs through every part of the business. We specialise in cross-border money transfers and are best known for our consumer service, which is what most people in Malta associate with Western Union.”
Western Union Business Solutions, he stresses, specialises in cross-border business-to-business transactions in the same way as Travelex Global Business Payments – which is why the acquisition makes such strong sense.
“The Travelex business is being integrated with Western Union Business Solutions and will continue to deliver the same services to business communities in all markets, including Malta.”
He points out that both companies have complementary strengths, which is another reason he is “so excited by the acquisition”.
“The Travelex business has a strong presence in countries, like Malta, where Western Union Business Solutions didn’t historically offer services. It also has enhanced platforms for business clients in different industries such as SMEs, law firms, universities and financial institutions and a strong culture focused on serving customers across all verticals.”
Mr Agrawal says that on the Western Union Business Solutions side there is Western Union’s strong brand recognition, global reach, excellent balance sheet and regulatory capabilities as well as a focus on serving the underserved in the business world, particularly SMEs – a perennially underserved market.
He says the most immediate effect of the acquisition of Travelex Global Business Payments companies around the world, including Malta, is the expanded reach and payment solutions they can offer their customers.
He adds: “A lot of things, however, remain unchanged. In Malta, for example, very little has changed. The team is exactly the same, the priority to customer service is the same, the way we transact business and make payments is the same. The only difference for our customers is that they now hear us answer the phone ‘Western Union Business Solutions’ as opposed to ‘Travelex Global Business Payments’.”
Mr Agrawal says that being part of such a recognisable global brand does affect the business in varying ways in different parts of the world. In Malta, Western Union’s consumer business is largely known through its affiliation with Fexserv, the main agent who offers Western Union’s consumer services.
“There has been some confusion about Travelex Global Business Payments being bought by Fexserv, which is absolutely not the case. We are completely independent of them, but it’s easy to understand how the confusion arises. So that affects our team in Malta, but they are also talking with customers every day and that helps build understanding of who we are as Western Union Business Solutions,” he says.
Mr Agrawal highlights that the combination of the two businesses allows his customers to send payments from 25 countries in over 140 currencies to more than 200 countries worldwide – more countries than either company offered alone prior to the acquisition.
“We are also adding more countries and offices; we recently opened an office in Warsaw for example and launched services in the UAE. We have further expansion plans in the pipeline as well.
“It’s a similar picture on the product side. Together we offer more services and payment platforms to a wider variety of customer segments than we were able to do apart. We also have greater financial strength, innovation and development teams than we did when we were competitors.”
Asked how Western Union is able to compete with banks in the global payment services sector, he says that their biggest differentiator is a relentless focus on customer service.
“Each of our clients has a dedicated customer relations manager who works with that client to understand his or her business and their cross-border payment needs. That way we can tailor a solution to fit those needs.
“For example, say you’re an SME and you’re importing cars from the UK and you need to pay a supplier within the next 30 days. The euro has been having a fairly torrid time recently, and you’re worried the rate may go against you. We can call you when the euro/pound exchange rate is at a favourable position for you and book a forward contract at that rate, which means you know exactly how much you’re paying but also, crucially, how much your supplier will receive.”
On the other hand, he says, if you’re a pensions provider or an employer who needs to make salary payments abroad that are time sensitive, they will work with you to come up with a long-term process that is efficient to handle so it doesn’t eat up hours of staff time, but also reliable so your pensioners or employees get their payments on time every month.
He adds: “Another key difference we have that sets us apart from banks is that we have our own global clearing network. This means we can send and receive payments using our own unique payments infrastructure that we developed in-house, which translates into our sending payments quicker (often instantly) and more transparently than our competitors.
“We also have longer working hours than the banks in Malta, which for business clients is naturally a big benefit.”
Mr Agrawal says Western Union operates in 25 countries (this number will grow by the end of the year) and has approximately 1,700 employees globally, including a team of 20 in Malta.
“We have almost 100,000 customers around the world, and our revenue in Q4 of 2011 increased by 130 per cent, or 13 per cent, excluding Travelex. We expect $400 million in revenues this year (which we announced in our Q4 earnings call this past February),” he says.
Mr Agrawal, has been with the company since 2006, is responsible for leading the continued growth and expansion of all Western Union Business Solutions products and services worldwide. Previously, he was responsible for regional global financial planning and analysis for Western Union.
Prior to joining Western Union, he was in the dual role of treasurer and vice president of Investor Relations for Deluxe Corporation. He started his career in the automotive industry at General Motors Corporation in Michigan, as a manufacturing engineer. He later joined Chrysler Corporation, serving as senior financial analyst and General Mills, Inc., where he held a variety of positions including assistant treasurer. Mr Agrawal holds an MBA from Columbia University.