Western Union, the largest US provider of money transfers, was founded in 1850 as an innovative and highly regarded telegram exchange firm. Headquartered in Colorado, the company has traded the once advanced telegram service that pioneered early computer networking for financial services.
Since the early 1980’s Western Union has re-invented itself as ‘the fastest way to send money world-wide’, expanding its global agent locations when deregulation in the remittance industry coincided with significant growth opportunity in what was then a new global marketplace.
In January 2011 Western Union acquired 100% of Angelo Costa, a group active in money transfer and services to immigrants. Angelo Costa has a network of 7,500 points of sale in various European countries.
Western Union has several divisions with products such as person-to-person money transfer, money orders, business payments and commercial services.
Transfer fees vary by location as the company often sets fees as high as they can for regions where little competition is available. Transfers in branch locations are more expensive than the company’s transfers online.
The most cost-effective way to pay is online or via the mobile app. Fees for most variations are only $4 – $7. But by using the mobile app and paying with a credit or debit card, if the money is collected in cash, the fee for a $500 transfer is $45.
Notoriously Poor Exchange Rates:
A transfer of 1,000 euro to dollars was calculated by Western Union at an exchange rate of 1.11 euros to dollars – below the mid-market rate of 1.40. Adding the 4.90 euro fee, Western Union charges over $290 to transfer 1,000 euro from Europe to the US which is one of the highest rates seen, even when contrasted with expensive banks.
Comparisons between Western Union and MoneyGram
Both companies follow similar procedures regarding using agencies as a primary means of making transfers. Western Union has more than 515,000 Western Union locations, operating in more countries than MoneyGram with about 320,000 locations. Western Union also offers more conveniences than MoneyGram, although the latter is trying hard to improve. Telephone transfers are available with Western Union, not with MoneyGram.
TRUSTPILOT rates Western Union at 8.7 with 4,235 reviews. The process of going to a specific agency to receive funds creates multiple problems as agencies simply shut without Western Union making note of the changes. Clients report travelling long distances to collect remittance only to find the Western Union agency closed. Invariably this led to long delays after frequent calls to customer service representatives who were unable to process remedial approaches. Telephoning Western Union to notify a change of residential address proved an issue with many clients who reported customer service was ‘overwhelmed and incapable’ of this transaction alone.
Yelp lists 39 reviews that award Western Union with 1.5 out of 5 stars. One reviewer summarised that Western Union’s customers who make domestic transfers are paying the worst transfer rates, but generally can be satisfied that their transfers will ‘likely’ be completed. Sending money globally, he observed, was processed effectively only 1 in 3 times. Many times complaints came from clients attempting to use convenient local agencies to make international transfers. These shops had no customer support so when issues arose clients were left with ineffective consumer support by telephone.
Because the company was once a reliable means to receive important telegrams (including WWII notices of soldiers lost in battle), Western Union has a very long trusted brand name. Sadly, it simply doesn’t live up to expectations any more. Clients are lulled into thinking the company is the industry standard and that presenting cash or credit at an agency is the best way to transfer money. Western Union and MoneyGram have a large share of global remittance, in spite of charging the worst fees to many immigrants who rely on remittance to support their families in third world countries, simply because competitive transfer companies are only recently challenging them.
1 out of 5 stars.
Convenient locations and a trusted brand name make Western Union appealing to global consumers.
The rates are not transparent. Ignoring mid-market rates, Western Union profits by offering sizable mark ups on currency exchange and then adds a service fee and fees for delivery. Website is oversimplified, lacking currency calculator. It targets uninformed consumers seeking reliable spot transfers and offers very little support service when transfers fail to be processed correctly.
Meta- The McDonald’s of currency transfers, Western Union is a global giant grown fat upon its brand recognition while its rates and customer service offer slim pickings.