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Payments to be contextual and transparent

Western Union provides consumers and businesses with fast, reliable and convenient ways to send and receive money around the world, to send payments and to purchase money orders. At Money 20/20 Europe in Copenhagen FTT spoke to Kerry Agiasotis, Chief Payments Officer at Western Union, about the biggest shifters in financial services and the future of payments.

Kerry, let’s start from WU’s vision…

K.A. Essentially, our vision is to be leaders in cross-border, crosscurrency money movement of all types. Whether it is individuals moving money, business to business, or consumers to businesses. Regardless of the use, our vision is to be a facilitator for modern money movers. And we believe when we do that, and do it well, good things happen. It has a positive impact on the overall economy, as well as for individual businesses and the communities they belong to.

Are you mostly oriented to retail or B2B?

K.A. We play largely in two primary markets: money transfer, which enables people to send money to one another on an individual basis either using cash or through digital transfer; and a payments market, involving business transactions on both a B2B and B2C basis, where payments can be made from business to consumer and consumer back to business. We deal with any type of business or organisation (including banks, nongovernmental or governmental organisations) that has a requirement to move money. These entities will be served either directly by brands like Western Union for the movement of money, or indirectly. And those indirect use cases could be through other providers, many of whom are here at Money2020, that can only do part of the process and therefore use Western Union for the other part. That includes banks as well.

How would you describe the biggest shifts in customers’ and businesses’ expectations about financial services?

K.A. Cloud technologies and the digitisation of consumer and business interaction – it is just something that we are all going to expect. Today, we expect to be able to interact with businesses much in the same way we communicate with our friends and family. These businesses are therefore equipping themselves with the technology to facilitate that. It is the same in the fintech community, which is why partnerships between incumbents and start-ups are so fundamental.

What do you consider as the biggest shifter in financial services?

K.A. I would say trust is the biggest driver in financial services, especially for the new generation, who are far more open to new and disruptive services. Also old and young generations have very different criteria for good and trusted financial services. Young people don’t think when they pay a bill that it should take three days to get paid. They expect immediacy and convenience, and this is shaping the established financial world. Businesses will need to keep pace with this trend, otherwise they will be left behind.

What key differences do you see from 50 years ago and today in financial transactions?

K.A. You know even 50 years ago the world was digital. You could be in North America sending money to Africa and money moved. Western Union has always had a communications infrastructure, which is at its core. What the world is shifting to now is, “we really value what you have, but we want to use it in different ways.” Customers do not want to think about moving money. They just buy something and expect it to be paid. I catch an Uber and the transaction already happens. Western Union can help with such cases. Now we are taking all our technology and opening it up to APIs. What that allows is for any service provider, whether it is a platform-based provider or a traditional financial institution, to take our services and embed them within their own services. And it’s really how we are adapting to these changes. We have 150 plus million customers, and we also work with hundreds of thousands of businesses. So, of course we are going to continue giving them services directly but there is also a huge opportunity to open up our capability to broader eco-systems.

Is it difficult to compete with other payment providers?

K.A. It is a challenging time as there are so many organisations doing the same thing and offering similar services. Everybody wants to be the next Western Union and so they start building capability. However, as they move forward they realise that actually it is hard to achieve such scale. It is hard to be in 200 countries and be well-regulated in each of them. It is hard to have money in places like Africa, Latin America and high-risk places.

What is the solution in this case?

K.A. I think as we move forward what you will find is there will be different types of players in the market place. We’ll likely see more consolidation in those platforms that lead, but they’ll use other services behind them. At Western Union we won’t necessarily do everything ourselves. We may provide services to a customer, but then we might use services and expertise from other companies – card is a good example. We made a strategic decision that card is not going to be a core for us because there are great companies out there like MasterCard and Visa. We will plug them into our ecosystem for when somebody wants to pay to a card. But what we will be able to say to an organisation, based on our vision, is it does not matter how you want to transfer money, whether it is sending or receiving – Western Union will be able to do it for you and you don’t need to worry about how we do it. We are trusted, we are secure and we are a company who are concerned about regulations and compliance.

How do you see payments in the future?

K.A. I see payments as being contextual and transparent. I don’t think we talk about payments as being an independent process, but part of the overall user experience. We will continue to interact as part of an eco-system. And the eco-system will be platformbased. As we move forward payments are integrated into the workflow that it originated from, not something separate.

There are a lot of discussions currently that we would not need banks one day…

K.A. That’s a nice dream maybe for some in the room. But the reality is that it is not just a technology issue. This is an economics issue. When you think about currencies, liquidity and finances, they are not governed by tech companies or fintechs, they are governed by governments who care about how they remain competitive in the world. All of these issues are geopolitical. They are not system issues. I think what happens as a consequence is that you are never going to have one payment system globally. You will have more convergence, maybe less friction, but there will always be multiple currencies, there is always going to be different governance around these currencies, and you will need providers to move value.

From Money 20/20 Europe (Copenhagen)

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