Western Union - First Large Corporation To Be Killed By Bitcoin

[notme]

Western Union :

Step 1 - I send 200 euro to my father in Thailand
Step 2 - My father goes to the nearest WU office and pick up 170 euro IN CASH, 25 minutes LATER in local currency
Step 3 - My father use the cash to pay a massage, 20 minutes later.

Time : 45 minutes
Fees : 30 euro

Bitcoin :

Step 1 - I send 2 BTC to my father.
Step 2 - My father use an exchange to sell 2 BTC for 200 USD. He withdraw the money. He receives 170 EURO (30 euro is the international transfer fee) 4 days LATER.
Step 3 - My father exchange the EURO to local currency (a small tax apply)
Step 4 - My father use the cash to pay a massage, 20 minutes later.

Time : 4 days and 20 minutes
Fees : 30 euro

That just screams opportunity to me: if Thais set up as locabitcoin agents they can make good money and offer a faster and cheaper service than Western Union. There is mountains of room for locals in poor countries to make money by killing Western Union.

Indeed.  Centralized exchanges tied to banks are only a temporary measure.

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[ManBearPig]

Comparing the long-established almost Monopoly that WU have with a nascent game-changer like Bitcoin at this stage is not going to show BTC as the winner YET.

When your father can spend BTC locally, that is when WU will suffer unless they have adapted.

None of these bloated corps like WU or PayPal will be killed by cryptos, they'll incorporate them even if they do so in their slow, lumbering way.

[Spendulus]

If they adopt Bitcoin and provide a wallet service in countries where having your own computer is uncommon, they could gain revenue. They would potentially become the equivalent of a bank.

Yes, they could charge a fee from their current offices for changing bitcoin received into local currency.  The primary communications vehicle for movement of bitcoin, though would be the smart phone.  As of the end of 2012, there were as many phones in the world as there were people, and about a quarter of them were smartphones.

The problem that WU would have is that for them to act as the "Receiving End" the sender would have to send bitcoin to WU. 

And why would anyone want to do that?

Otherwise, WU could offer a service which consisted of being an exchange agent for anyone walking in off the street with bitcoins on their phone.  But anyone could do that - the first that comes to my mind would be the 'check cashing' stores.

[abbyd]

Western Union is  looking too archaic to survive the rise of Bitcoin.

To me they look like a classic "dinosaur" corporation. They'll die with their cocks in their hands. Their CEO:
Jack M. Greenberg (born 1942) was Chairman and CEO of McDonald's Corporation from 1999 through 2002...

[bonker]

Western Union is  looking too archaic to survive the rise of Bitcoin.

To me they look like a classic "dinosaur" corporation. They'll die with their cocks in their hands. Their CEO:
Jack M. Greenberg (born 1942) was Chairman and CEO of McDonald's Corporation from 1999 through 2002...

Absolutely.

Its way to large and over extended to cope with the fundamental changes that Bitcoin will bring. Personally I think it's too obese to adapt and will die. 5 years until insolvency.

[101111]

They have been around for 160 years so they're doing something right, and clearly they adopt new tech, so they get my respect, and I'll bet my bottom dollar they won't let bitcoin slip through their fingers, cos they'll want to be around for another 160 yrs. Prolly got their legal dept, IT & product managers etc already working on it.

edit: they are certainly no slouches when it comes to tech and innovation eg "In the 1970s WUI installed and leased to the U.S. Department of Defense (DOD) ..... a proof of concept for the technology of packet switching which later became the Internet." http://en.wikipedia.org/wiki/Western_Union

[jubalix]

Western Union :

Step 1 - I send 200 euro to my father in Thailand
Step 2 - My father goes to the nearest WU office and pick up 170 euro IN CASH, 25 minutes LATER in local currency
Step 3 - My father use the cash to pay a massage, 20 minutes later.

Time : 45 minutes
Fees : 30 euro

Bitcoin :

Step 1 - I send 2 BTC to my father.
Step 2 - My father use an exchange to sell 2 BTC for 200 USD. He withdraw the money. He receives 170 EURO (30 euro is the international transfer fee) 4 days LATER.
Step 3 - My father exchange the EURO to local currency (a small tax apply)
Step 4 - My father use the cash to pay a massage, 20 minutes later.

Time : 4 days and 20 minutes
Fees : 30 euro

wait it only costs me 8$ or 0$ for international wire transfers

[abbyd]

They have been around for 160 years so they're doing something right, and clearly they adopt new tech, so they get my respect,

I don't have that much respect for a corporation that bilks immigrants for fees as high as 30% to transfer money to their families.
I'd say they're a perfect target for a bitcoin entrepreneur. If you think about it, WU is part of the global "race to the bottom" parasitic chain...

[bitcon]

i'd rather bitcoin not be tarnished by WU's name.

[101111]

They have been around for 160 years so they're doing something right, and clearly they adopt new tech, so they get my respect,

I don't have that much respect for a corporation that bilks immigrants for fees as high as 30% to transfer money to their families.
I'd say they're a perfect target for a bitcoin entrepreneur. If you think about it, WU is part of the global "race to the bottom" parasitic chain...

it's hard to believe a US financial institution would act unethically

[ex-trader]

Plenty of big companies have died through history, just as new corporations grow and flourish, not to sound like the Lion King but it's the corporate 'Circle of Life'. Changing technology and consumer behaviour causes both.

Regarding Western Union and any other money transfer business, these are the businesses that absolutely face the most threat from BTC. However two things need to happen before it's an issue:

1. The recipients need to be able to spend the BTC directly on goods and services (like food and rent) in predominantly third-world countries, or not get charged fortunes in converting back to Fiat.

2. BTC needs to be more stable. Unless entire economies are denominated in BTC (which will NEVER happen) then exchange rates matter and there's no point sending someone 100USD in BTC to find it's 95USD by the time they convert it back because it's value has moved.

[bitcon]

2. BTC needs to be more stable. Unless entire economies are denominated in BTC (which will NEVER happen) then exchange rates matter and there's no point sending someone 100USD in BTC to find it's 95USD by the time they convert it back because it's value has moved.

You're wrong because just as easily you can send someone 100USD BTC and by time they get it its worth $110. This would encourage more people to use it instead of fiat which always inflates.

[abbyd]

2. BTC needs to be more stable. Unless entire economies are denominated in BTC (which will NEVER happen) then exchange rates matter and there's no point sending someone 100USD in BTC to find it's 95USD by the time they convert it back because it's value has moved.

There's an old story about the Weimar hyperinflation:

A man steps into a cafe and orders a cup of coffee priced at 6 million marks. He sits down, reads the newspaper, finishes his coffee, and orders another cup. When the waiter brings the bill,  it's for 14 million marks. He protests that 6 million times 2 is 12 million. The waiter replies "Next time, please order both cups in advance. While you were reading the newspaper, the price of a cup of coffee went up to 8 million marks".

[ex-trader]

You're wrong because just as easily you can send someone 100USD BTC and by time they get it its worth $110. This would encourage more people to use it instead of fiat which always inflates.

Rubbish. When I send someone 100USD it's because they want 100USD, not some amount of money that might be more or might be less....

[Anon136]

They have been around for 160 years so they're doing something right, and clearly they adopt new tech, so they get my respect,

I don't have that much respect for a corporation that bilks immigrants for fees as high as 30% to transfer money to their families.
I'd say they're a perfect target for a bitcoin entrepreneur. If you think about it, WU is part of the global "race to the bottom" parasitic chain...

you are kidding right... you know that kind of ridiculous shit is caused by government right. There is no way on earth WU could stay in business if it was just raking in 30% profit on the movement of money from one place to another.... Hell id get in my car and start driving money around if i was able to charge 30% premium and keep it for myself. You have to know that there is no way in hell WU would have to charge anything like that in a free market. Its very difficult and costly for a company like western union to get fiat from one jurisdiction into another.

[Stampbit]

western union has the advantage of being physically available and known, as well as working in a stable currency. I dont think its going to disappear from bitcoin.

[Spendulus]

Plenty of big companies have died through history, just as new corporations grow and flourish, not to sound like the Lion King but it's the corporate 'Circle of Life'. Changing technology and consumer behaviour causes both.

Regarding Western Union and any other money transfer business, these are the businesses that absolutely face the most threat from BTC. However two things need to happen before it's an issue:

1. The recipients need to be able to spend the BTC directly on goods and services (like food and rent) in predominantly third-world countries, or not get charged fortunes in converting back to Fiat.

2. BTC needs to be more stable. Unless entire economies are denominated in BTC (which will NEVER happen) then exchange rates matter and there's no point sending someone 100USD in BTC to find it's 95USD by the time they convert it back because it's value has moved.

No, the bitcoin does not need to be 'more stable'.  Not if the alternative is WU at 30% fees.  High instability does not present more risk than certain loss of 30%.

[ex-trader]

Not if the alternative is WU at 30% fees. 

Where are WU fees 30%?

The WU global average fee is about 5%. The countries where this is higher is intra-Africa i.e. from one african country to another, but the volume of these transactions are small.

The vast majority of WU transactions are from the developed world to the third world and the fees 10% or less. To replace these with BTC both parties would need computers or mobiles and an ability to spend it in BTC, otherwise they'll just get charged by someone else to change it into cash.

Show us a real example of how a Filipino maid working in UAE can send it home to a family member in BTC and they can then spend the BTC on their rent and food and I'll start to be convinced WU is at risk.

[Spendulus]

Not if the alternative is WU at 30% fees.  

Where are WU fees 30%?

The WU global average fee is about 5%. The countries where this is higher is intra-Africa i.e. from one african country to another, but the volume of these transactions are small.

The vast majority of WU transactions are from the developed world to the third world and the fees 10% or less. To replace these with BTC both parties would need computers or mobiles and an ability to spend it in BTC, otherwise they'll just get charged by someone else to change it into cash.

Show us a real example of how a Filipino maid working in UAE can send it home to a family member in BTC and they can then spend the BTC on their rent and food and I'll start to be convinced WU is at risk.

5%??

Here's the linky for calculating rates and total costs.

https://wumt.westernunion.com/WUCOMWEB/priceShopperRedirectAction.do?method=load&countryCode=US&languageCode=en

Note they make money on the currency translation as well as on the 'moving of the money'.  For the phillipine peso they do an exchange rate of 39.7, but standard at this moment is 40.9, and street is 50.

I assume you would agree with using the street exchange price, and then including the fees, there's your 30%.  More or less.

[abbyd]

They have been around for 160 years so they're doing something right, and clearly they adopt new tech, so they get my respect,

I don't have that much respect for a corporation that bilks immigrants for fees as high as 30% to transfer money to their families.
I'd say they're a perfect target for a bitcoin entrepreneur. If you think about it, WU is part of the global "race to the bottom" parasitic chain...

you are kidding right... you know that kind of ridiculous shit is caused by government right. There is no way on earth WU could stay in business if it was just raking in 30% profit on the movement of money from one place to another.... Hell id get in my car and start driving money around if i was able to charge 30% premium and keep it for myself. You have to know that there is no way in hell WU would have to charge anything like that in a free market. Its very difficult and costly for a company like western union to get fiat from one jurisdiction into another.

Well how much DO the feds skim off WU? I'm sure it all depends how many congressmen they've bribed?
Even if WU had to split the 30% 50/50 with Uncle Sam, I'd still see no reason to shed a tear for their CEO.
 
Obviously they're able to make big money because:
* They have a near-monopoly
* The majority of their customers don't speak English well, nor are they good at math
* They do a large number of small transactions

Other posters have a point that there will be friction when converting BTC to/from local currency, but I still think the business is ripe for some competition.