Western Union Enables Real-Time Account-To-Account X-Border Payments For Banks, Digital Wallets

Western Union’s history as a retail cross border remittance platform is moving money between people, largely via cash, within minutes. Today, Western Union announces that it has expanded its real-time global payments capabilities to include real-time account-to-account transfers to an account or a mobile wallet for select banks or digital wallet providers in 17 countries.

Western Union CEO Hikmet Ersek told Karen Webster that real time means that receivers will have funds available to spend within minutes, enabling new real-time, cross-border, cross-currency payments capabilities for C2C, B2C and B2B use cases.

“We move money in minutes on the retail side of our business, and asked ourselves whether we could move money in real time to an account or mobile wallet,” Ersek told Karen Webster. “And what we found is — with our global network of connections and relationships, we absolutely could.”

Launch countries include Benin, Burundi, Cameroon, China, India, Indonesia, Kenya, Nigeria, Pakistan, Philippines, Sri Lanka, Democratic Republic of Congo, Ghana, Malawi, Mozambique, Zimbabwe, and Uganda. Ersek said that 100 additional countries are being evaluated for the enablement of real-time payment capability by the end of 2020.

The bigger picture plan for Western Union, according to Ersek, is to leverage the firm’s roots in C2C remittances and extensive global relationships with financial services players to build a platform ready to power the next-generation payment experiences for businesses and FIs for their “diverse cross-border payments needs.”

The Power Of Relationships

There are no shortage of reasons a customer or business would want or need to move money cross-border in minutes. Remittances, eCommerce, payroll, real estate and travel — the uses cases for cross-border funds transfers in minutes are expanding, Ersek noted, and consumer and business expectations for immediate and secure cross-border money movements are expanding right alongside them.

Ersek told Webster that keeping pace with those expectations is possible, both because of investments Western Union has made in enhancing its global payment network over the last several years and because of their direct relationship and access to banks and wallet providers all over the world.  To date, Western Union has forged more than 40 banking and payment partnerships in over 100 countries and maintains direct account-to-account connections to over 2 billion bank accounts globally.

“We have direct access to accounts and wallets — we aren’t dependent on a secondary switch to move money into those accounts,” Ersek explained. “Within those already existing relationships we can send the message that a payout is going to happen in the system. The recipient gets the money nearly instantly — and we settle with the banks overnight.”

The net result, he noted, is that a consumer who wants to send funds from their bank account in Boston to a mobile wallet in Burundi can do so and know that good funds will be available on the other side within 90 seconds.  And that knowledge on the customer’s part — combined with the FI’s confidence they can offer up that capability to the customer without facing notable risk — is the beginning of opening up a whole new world of cross-border payments experiences for both consumers and institutions.

Changing The Landscape And Overcoming The Challenges

What is rolling out today, Ersek noted, is a good start — but there is more work to be done to unlock B2B real-time payments capabilities, cross-border.

In B2B payments — where individual transfers are often measured in the millions of dollars — risk and clearing and settlement requirements are different than for those in the hundreds or thousands of dollars.

But, he noted, it is a challenge they are confident they are going to resolve — because quite simply, the forward progress of the market demands it. The landscape of payments is shifting globally, and Western Union’s full expectation is that opening its platform to enable direct, account-to-account access in real time will be a new factor driving that shift forward.

“Our account-to-account real-time payments capabilities will change the international payments landscape — especially in developing and emerging markets which are central in our landscape and critical for unlocking opportunities for global economic growth. We believe we can help FIs create opportunities and serve their customers better.”

What those services will look like, he says, will vary by the player. It might mean, as it does in the case of one Saudi Arabian bank, white labeling their real-time, account-to-account cross-border platform so that FIs can offer the capability directly to their customers within their mobile wallet.  Or it might mean partnering with regional digital wallet providers and helping them expand from a single sphere of operation in one part of the world to a fully global operation. The potential uses range widely, he noted, because by opening up the capability for real-time payments, the hope is that they can open up creativity from FIs on how best to leverage it.

“What we realized to make real-time cross-border happen was a problem that could only be solved with the global reach, inter-connectedness and speed of our platform,” Ersek explained. “I think what we are going to see is a lot of solutions no one was able to think of before because that critical real-time capability was missing — those solutions are now going to become possible.”