Western Union is preparing to face innovation head-on as it announced the launch of a digital bank account transfer service in the United Kingdom. It will be competing with major fintech startups including Transferwise for the command of the market.
The consumers in the United Kingdom will now be able to directly send a maximum of £50,000 from the Western Union website or app into other bank accounts across the globe, with no extra fees charged on top of the currency exchange commission.
Western Union said that the move was prompted by the double-digit growth in its digital business for numerous quarters, as well as 70 percent of its digital transactions being carried out through the app.
Graham Baker, the UK head of global money transfers of the company, said that innovation represents a “big opportunity” for firms to drive competition in currency transfers, even though he does not believe that fintechs such as Transferwise pose any true threat to the space.
He stated: “People don’t realise that we have a huge digital base, as we already have more than $400m (£306m) in digital revenue globally.”
He added: “I think the speed at which fintechs are moving is good for the market as it gives customers the choice, [however] I don’t see fintechs as competition for us.”
He continued: “But overall I think a healthy and competitive market is good for both the customer and the company.”
According to figures from the World Bank, over $26 billion was sent in bank account transfers from the United Kingdom to other countries last year.
The sector has been abounding with competition during recent years, with significant players coming out of the United Kingdom to disrupt the industry. Transferwise itself has been able to raise nearly $400m in funding to date, with others including Azimo, a remittances fintech, and Starling Bank, a digital banking startup, being a pioneer in international payments.