Western Union: Migration Slowdown Reduces Growth of Remittances Business

A reduction in migration across Latin America led to slower growth in the remittances business at Western Union in the first quarter.

The provider of cross-border, cross-currency money movement, payments and digital financial services saw its volume of Consumer Money Transfer (CMT) transactions in the Americas decline by 2% in the first quarter while its CMT business in the rest of the world, excluding Iraq, rose by 10%, according to a presentation released Wednesday (April 23). Overall, the number of CMT transactions was up by 3%.

“Migration across Latin America has been slowing for several quarters, and the first quarter was a continuation of those trends,” Western Union CEO Devin McGranahan said Wednesday during the company’s earnings call. “Slower migration levels in the region have led to lower intra-[Latin America and the Caribbean (LACA)] remittance volumes.”

The trend demonstrated the importance of the company’s “globally diversified business,” McGranahan said.

The Americas account for half of Western Union’s CMT revenue — with North America at 39% and LACA at 11% — and the rest of the world accounts for the other half, according to the presentation.

“While the Americas continued to struggle with geopolitical headwinds, rest of world, which represents 50% of our money transfer revenues, continued to perform well, with double-digit transaction growth in all three underlying regions,” McGranahan said during the call.

The three fastest-growing corridors for the CMT business are France to Morocco, Spain to the Dominican Republic and the United Kingdom to Saudi Arabia, McGranahan said.

When an analyst asked during the call about any impact tariffs might have on Western Union, McGranahan said that while migration patterns are more important, the firm is just like any other consumer business.

However, the company saw during the time when inflation was increasing at its fastest pace that its customers were more resilient than those of companies in other industries, he said.

“If in some period of time tariffs have an effect on raising consumer prices — which I won’t profess whether they will or won’t, but that is a theory of the case — we actually believe our customer will remain relatively resilient given the importance of sending money home,” McGranahan said during the call.

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