For over a hundred years, the global money transfer landscape has radically evolved from localized payments, that were the preserve of banks, to the emergence of numerous money transfer companies. One of the world's leading money transfer company, Western Union, has managed to keep up with the changing financial landscape. It has established itself as a trusted global leader, operating in more than 200 countries with over 500,000 agents worldwide.
Recently, Western Union announced it is ready to add cryptos to the list of currencies on its list of operations. Months prior to this announcement, the company was against plans to include cryptocurrencies in its transfer business citing low adoption of cryptos by its customers. But this has since changed. Speaking to Reuters Plus, Odilon Almeida, President, Western Union Global Money Transfer said the company is ready to include any currencies in its service.
He said, “Western Union is ready today to adopt any kind of currency. We already have 130 currencies. If we one day feel like it’s the right strategy to introduce cryptocurrencies to our platform, technology wise, it’s just one more currency.”
Bridging the Gap
The adoption of cryptocurrencies by Western Union will open up the borderless money transfer ecosystem beyond fiat. This will bridge the gap that currently exists in the conversion of cryptos to fiat currency. It would also help alleviate high transactional costs currently pegged on exchange rates. This, ultimately, will promote global financial inclusion where crossborder transfer and the use of cryptocurrencies will become much more acceptable.
Beyond this, a paradigm shift is also expected. According to William Davis, Managing Director at LDJ Capital, mobile money payments have resulted into a shift on how conventional global money transfer operates and is maintaining a momentous growth. It is, therefore, imperative that traditional money transfer entities diversify their services to stay in business despite the onslaught from mobile payments services.
For Davis, the inclusion of crypto payments into traditional money transfer services will be a step ahead in capturing market segment for digital goods.
He says, “Mobile payments passed the global $1 trillion dollar mark in 2016. As peer to peer lending and global trade grows, crypto payments will augment if not reshape the payment landscape allowing a new barter type mechanism that very often is preferred by purchasers particularly in industries with digital goods and existing virtual currencies.”
The move by Western Union will help boost the much needed legitimacy and mass adoption of cryptos. "If Western Union actualizes its decision to add cryptocurrencies to its services, it will build investors’ confidence as well as other players in the industry. This is likely to catalyze the adoption of cryptocurrencies by the masses in the foreseeable future," notes Chief Editor at FamilyOffices.Today, Michael Hull.
This is because the money transfer giant is better equipped and has structures in place to support governance, reduce volatility and encourage compliance in the industry. These all have been major hindrance towards mass adoption of cryptocurrencies.
Implementation of this announcement by Western Union will definitely stimulate the financial sector and encourage players to consider integrating cryptocurrencies into their operations.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.