Western Union and messaging app WeChat joined forces in the US, as the traditional money transfer giant faces a competitive threat to its core business from mobile-based newcomers as well as social media and messaging firms.
Users of WeChat, which is owned by China’s Tencent Holdings, will be able to send money internationally to other users in 200 countries, thanks to the agreement with Western Union. Rollout is planned in additional countries following the US, although the schedule was not shared.
Western Union recently launched its WU Connect platform which embeds its money transfer capability into third-party messaging or social media platforms. The WeChat agreement is a result of that programme.
Market leaders Western Union and Moneygram have seen their position under attack from newcomers such as Azimo, Xendpay and WorldRemit, which offer to undercut the industry giants.
In addition, messaging firms are also interested in P2P payments. WeChat, for instance, already offers such a service domestically in China. So are the likes of Facebook, Google and even, reportedly, Apple. Such a lineup poses a serious threat to Western Union’s core business.