Western Union has reported a 12% decline in revenues in Q2 22, driven by macroeconomic headwinds, the sale of its business segment and slowing digital growth. However, the company is hoping that revamping customer acquisition will unlock long-term revenue gains.
Western Union Q2 22 results see decline in consumer revenues
WU saw consumer revenues decline 9% while transactions were down 13% YoY. Digital money transfers, representing 25% of total consumer revenues and 33% of total transactions, decreased by 6%. Cross-border principal also saw a decline of 12%, while principal/transaction growth stayed at 0%. Digital also saw revenues shrink by 6%, although share of consumer payments remained at 25%.
Key retail markets saw continued softness that contributed to revenue declines. US domestic business caused a 4% drag on consumer revenues, while in Europe underperformance was caused by inflation, geopolitical instability and slowing economic growth, with WU’s largest markets hit worse. APAC also saw a 10% revenue drop while the Middle East and South Africa reduced by 4%. LatAm and the Caribbean, meanwhile, grew by 2%.
However, CEO Devin McGranahan did outline a future revenue growth strategy built on customer acquisition, particularly on the digital side. The company plans to improve the onboarding experience and other retention-impacting features, with increased investment in the Western Union Digital App and wallet-based digital banking platform in Europe. The company is also re-allocating funds to North American marketing efforts in a bid to acquire more omnichannel customers. It also plans to build on the success of its exclusively branded locations in Brazil, with pilots beginning in Europe.
Regarding the ongoing economic slowdown, WU has not seen a notable change in average amounts sent by customers as yet, but believes there may be an increase over time. However, the results have caused WU to again downgrade its projections for FY22. It now expects GAAP revenue to reduce 11-13%, compared to the projection of a 9-11% reduction in Q1, itself a revision from a mid-single-digit projection made in February.