Western Union considering using Bitcoin

[Peleus]

I'm confused.

What could WU do with Bitcoin that they couldn't already do with fiat?

Wouldn't they have a huge float in an account in each currency and just arbitrage between the accounts to keep them level?

Why would it be necessary to go Fiat *Location 1* > BTC *Tranferring* > Fiat *Location 2* when they can just go Fiat > Fiat

You're missing some information about how money works.

It is NEVER Fiat -> Fiat (Dollars in New York to GBP in London, for example).  Money takes a circuitous route from country to country with little fees at every stop, and the people who control that route are the banks.  They make their handshake deals...

Bitcoin takes that fee structure away from the banks, and gives it (for much less, assumptively) to the most efficient forex exchanger.

It would take a company at least the size of WU to pull it off.  There's nothing in bitcoinland that's even remotely close.

Hmm, I figured that they would have essentially a "float" in most major denominations and use internal account methods to track the money and authorize it from each account. That way when you send money say from the UK to the US, the money doesn't actually get transferred from GBP to USD (and have the associated fee's), it would simply be a deposit in GBP and a withdrawl in USD, later to be cancelled out (on average) by someone sending money from the US to the UK.

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[Minor Miner]

The best part of this would be the end of Gox and the mickey mouse "exchanges".   WU would provide the legitimacy and the volume required that would get bitcoin on a real exchange with the other currencies.   Gox would be irrelevant overnight and we could all get feeds that actually work.

[BTC Books]

Hmm, I figured that they would have essentially a "float" in most major denominations and use internal account methods to track the money and authorize it from each account. That way when you send money say from the UK to the US, the money doesn't actually get transferred from GBP to USD (and have the associated fee's), it would simply be a deposit in GBP and a withdrawl in USD, later to be cancelled out (on average) by someone sending money from the US to the UK.

You're re-inventing the Islamic Halawa transfer system:

https://en.wikipedia.org/wiki/Hawala

Money in the West works differently.  We can be open about charging interest, for example.

[Peleus]

Hmm, I figured that they would have essentially a "float" in most major denominations and use internal account methods to track the money and authorize it from each account. That way when you send money say from the UK to the US, the money doesn't actually get transferred from GBP to USD (and have the associated fee's), it would simply be a deposit in GBP and a withdrawl in USD, later to be cancelled out (on average) by someone sending money from the US to the UK.

You're re-inventing the Islamic Halawa transfer system:

https://en.wikipedia.org/wiki/Hawala

Money in the West works differently.  We can be open about charging interest, for example.

Thanks for the link. I'm not necessarily advocating it in any way, I just always thought that it would be the type of system WU would use considering it can "trust" itself, and the Hawala agents (in this case) are simply bank accounts it owns in different countries. Unless one countries bank account gets quite low (Ie. lots of people sending money to the US but no one sending it out) they would be avoiding international transaction fee's via this method.

[gollum]

Hmm, I figured that they would have essentially a "float" in most major denominations and use internal account methods to track the money and authorize it from each account. That way when you send money say from the UK to the US, the money doesn't actually get transferred from GBP to USD (and have the associated fee's), it would simply be a deposit in GBP and a withdrawl in USD, later to be cancelled out (on average) by someone sending money from the US to the UK.

You're re-inventing the Islamic Halawa transfer system:

https://en.wikipedia.org/wiki/Hawala

Money in the West works differently.  We can be open about charging interest, for example.

Western Union is probably already using some kind of "Halawa" internally.

[BTC Books]

You're re-inventing the Islamic Halawa transfer system:

https://en.wikipedia.org/wiki/Hawala

Money in the West works differently.  We can be open about charging interest, for example.

Thanks for the link. I'm not necessarily advocating it in any way, I just always thought that it would be the type of system WU would use considering it can "trust" itself, and the Hawala agents (in this case) are simply bank accounts it owns in different countries. Unless one countries bank account gets quite low (Ie. lots of people sending money to the US but no one sending it out) they would be avoiding international transaction fee's via this method.

They avoid their fair share, I suppose.

You should read the Wiki article on WU - it's a fascinating company:  forward-thinking, but still steeped in a certain amount of internal tradition.  I'm going to keep my eyes open for a good book on their history.  I do run across the odd book every now and then.  

[Minor Miner]

You're re-inventing the Islamic Halawa transfer system:

https://en.wikipedia.org/wiki/Hawala

Money in the West works differently.  We can be open about charging interest, for example.

Thanks for the link. I'm not necessarily advocating it in any way, I just always thought that it would be the type of system WU would use considering it can "trust" itself, and the Hawala agents (in this case) are simply bank accounts it owns in different countries. Unless one countries bank account gets quite low (Ie. lots of people sending money to the US but no one sending it out) they would be avoiding international transaction fee's via this method.

They avoid their fair share, I suppose.

You should read the Wiki article on WU - it's a fascinating company:  forward-thinking, but still steeped in a certain amount of internal tradition.  I'm going to keep my eyes open for a good book on their history.  I do run across the odd book every now and then.  

read the prospectus from when they were spun out of FDC, it is interesting it wasn't that long ago.    or their annuals.  you know that if you call IR of any public company and request hard copies that they have to send you their annual right?    I do not understand why bitcoins would really help them since they basically take money, and then let you (not you since it goes to someone else) withdraw the money at another location.   so why use bitcoins for something they already do over their own network?

[Peleus]

Yeah, I know it's an assumption, but if they are using some form of internal Hawala I don't see how BTC would be useful for them.

[BTC Books]

...so why use bitcoins for something they already do over their own network?

Two reasons, I would venture to say:

One:  to fill the obvious (and obviously profitable) void in bitcoinland on the exchange front.  And

Two:  To preempt (to forestall or prevent (something anticipated) by acting first; preclude; head off), by integration, what is quite likely to be a successful competitor.

As I mentioned earlier, they're a very forward-thinking company.

[Minor Miner]

...so why use bitcoins for something they already do over their own network?

Two reasons, I would venture to say:
One:  to fill the obvious (and obviously profitable) void in bitcoinland on the exchange front.  And
Two:  To preempt (to forestall or prevent (something anticipated) by acting first; preclude; head off), by integration, what is quite likely to be a successful competitor.
As I mentioned earlier, they're a very forward-thinking company.

just to nit pick.   there is no need for exchanges (the concept is silly for the long term) as BTC will trade on an FX exchange when demand merits which will eliminate the need for gox et al.   But they would be a broker or market maker which could be great.

[Peleus]

...so why use bitcoins for something they already do over their own network?

Two reasons, I would venture to say:
One:  to fill the obvious (and obviously profitable) void in bitcoinland on the exchange front.  And
Two:  To preempt (to forestall or prevent (something anticipated) by acting first; preclude; head off), by integration, what is quite likely to be a successful competitor.
As I mentioned earlier, they're a very forward-thinking company.

just to nit pick.   there is no need for exchanges (the concept is silly for the long term) as BTC will trade on an FX exchange when demand merits which will eliminate the need for gox et al.   But they would be a broker or market maker which could be great.

To be fair, given the time this will take (long term), there could be quite a profitable short - medium term given a lot of the infrastructure is already there for them.

[Hfleer]

They can either embrace Bitcoin or die

[deepceleron]

This is like when you could order telegrams over the Internet from Western Union. It is hard to make a business model by embracing the thing that makes you irrelevant.

[psybits]

This has been discussed here and I recommend anyone looking for more info to take a look

https://bitcointalk.org/index.php?topic=179943.0

[BTC Books]

This is like when you could order telegrams over the Internet from Western Union. It is hard to make a business model by embracing the thing that makes you irrelevant.

That was a thing?  Seriously?

I'm shocked that I missed it...

[gollum]

This is like when you could order telegrams over the Internet from Western Union. It is hard to make a business model by embracing the thing that makes you irrelevant.

No I think its a win-win situation for both bitcoin users and Western Union.

Many of Western Unions customers are people from poor countries working in richer countries and they send money to their family in the home country.
With the progress in developing countries and internet penetration around the globe Western Unions clientbase will decrease when people find easier and cheaper ways to send money home.
So this is an opportunity for Western Union to take the step to the internet age of crypto currencies, or become as obsolete as telegrams.

It is beneficial for bitcoin as well if Western Union "franchises" bitcoin, the moment they do so 7 billion people will be able to buy, sell or transfer bitcoins even if they dont have internet or mobile phones.
Without Western Union this development might take decades to reach 7 billion people.

[Spjuth]

I think it is brilliant. WU have offices all over the world. All they need to do is to exchange bitcoin for fiat and vice versa.

So if someone in California wants to send money to a relative in Indonesia, he goes to WU and buys bitcoins (or he buys them from wherever since he lives in California). He then sends them to his relative in Indonesia who in turn sells them for local fiat at WU. So all WU does is guarantee liquidity all over the globe. Of course they can also help out with creating wallets for people in rural areas without computers/mobile phones/internet.

If Western Union would start doing this they will guarantee their survival and help the Bitcoin community and the world!

[Tirapon]

I think it is brilliant. WU have offices all over the world. All they need to do is to exchange bitcoin for fiat and vice versa.

So if someone in California wants to send money to a relative in Indonesia, he goes to WU and buys bitcoins (or he buys them from wherever since he lives in California). He then sends them to his relative in Indonesia who in turn sells them for local fiat at WU. So all WU does is guarantee liquidity all over the globe. Of course they can also help out with creating wallets for people in rural areas without computers/mobile phones/internet.

If Western Union would start doing this they will guarantee their survival and help the Bitcoin community and the world!

Now this would be a great idea, something I hadn't even considered.

[virtualmaster]

Western Union would be a great bitcoin exchange if receives and sends bitcoins and could help out the bitcoin community from the actual exchange misery.

[gollum]

I hope someone at Western Union see this post and realizes that they cannot miss this one time opportunity with bitcoin.

WU can right now create a huge market for web shopping from developing countries, countries where most people do not have access to credit cards.

Even people with credit cards might prefer to use bitcoin when shopping online since it is more secure to spend bitcoin than use VISA card online.
What people need is easy methods for the exchange of cash to bitcoin through a dealer, and WU can offer that service.