Western Union: The 1800s tech that's still the fast way to send cash

In a world where technology makes so much possible in an instant, moving money can still be a waiting game. With smartphones, you can send cash to friends in just a few taps - but it can take one to three days before it shows up in the bank.

One trusty way to receive money within minutes relies on technology that predated the first text message by more than 100 years: the wire service.

Hikmet Ersek, chief executive of Western Union, says the company has advanced considerably since the days of the telegraph. Its mobile business, driven primarily through a smartphone app, is the fastest growing slice of the company's revenue, which grew 2 percent in the last quarter to $5.74 billion.

But Ersek, who has led Western Union since 2010, said that most people still prefer to send money from one of its retail locations; there are more than 500,000 worldwide, including 50,000 in the United States.

Ersek recently chatted with The Washington Post about its core business, immigrants in the United States sending cash abroad to family members. He also spoke about the role women play in household finances and the future of mobile payments. This has been edited for length and clarity.

Q. Who is your typical customer?

A. About 60 percent of our customers are migrants. The global immigrants market is more than $500 billion a year, most of them supporting families back home. Is it your mom or uncle, children? The number one reason for sending money back home is supporting their children so that they have a better education.

Q. Your company is global; where do you have the biggest reach?

A. Our largest market is the U.S. outbound market: sending money. In the receiving market, the number one country is India, then it's Mexico, then Philippines, then China.

Of the "send" countries, the number one market is definitely the U.S. Saudi Arabia is worldwide second because of the immigrant market. In Europe, places like France and the United Kingdom are the largest countries.

Q. A theme of the economy this year has been that the U.S. is doing well while other countries are struggling. How does that affect your business?

A. I'm not sure if the economy is doing very well in the U.S. I think it's doing better. Obviously the U.S. economy is doing much better and creating more jobs than the European economy, but our business is extremely resilient. Our customers have been very resilient, but we do see a difference sometimes in the dollar amounts. Instead of sending $300, they send $280.

Q. As you know, mobile payments are huge abroad, and some smaller players are trying to infiltrate the market here for people who want to send money to family members abroad. How many of your customers are sending money on their phones, and what is Western Union doing to compete in this space?

A. Our digital business is 6 percent of our total revenue. It's the smallest but fastest-growing part of our business. In the U.S., more and more customers want to send money digitally.

Within the digital business, the fastest growing part is mobile. People use their app while they go underground in New York and they get a phone call from Bangladesh, from their mom saying she wants $160, and they can use their app and send the money immediately. I believe in the future that people will use mobile devices - it could be a watch, by the way - to send money.

On the receive side though, we don't see our customers using mobile yet. The only country really is Kenya. But we don't see a lot that people will get money on their mobile phones and then use that phone to go and shop for milk. So the use case on the mobile receive side is less. But on the send side, I believe, that's going to be a huge part of Western Union in the future.

Q. Social media companies like SnapChat and Facebook have partnered with money apps to let people send money to friends and family. How does Western Union compete with these efforts?

A. It's easy to send money from New York to San Francisco, but it's not easy to send money from New York to Sri Lanka. Facebook and Google and others struggle with that. If you want to move money across borders, you need a company like Western Union. It's easier to do it within one country, because you don't need that kind of expertise, that kind of competency, like you do with cross-border. That's our competitive advantage.

Q. Tell me about Western Union's partnership with Apple Pay.

A. That's always a part of our strategy. We are opening our network to any way of collecting payments. If people are using Apple Pay, why not use your Apple Pay to send money to Sri Lanka?

You have money on your phone. You get a call from your brother, you go with your Apple Pay and send money to your brother, who within minutes can pick up $150 in Sri Lanka. It's the same as collecting money from a MasterCard, Visa or American Express. We can connect people globally, and people can send money in a way they want. I think people like that.

Q. What do you think mobile payments will look like in the future?

A. It's my opinion that the mobile device in the future will have a different form than today. It's changed a lot. Today's phones are small computers, and in the future, the watch could be also a wallet.

Q. Security is on everyone's mind right now. What are some of the things Western Union is doing to protect customers' data?

A. Everybody should be concerned, because that is the new way of doing crime. In the past you went to a bank and robbed the bank. Now you're going online to try to get money there. Our system double-checks everything. Let's say you want to send money; you use your credit card online. But before we pay out the money, we double-check: Is it the right person? Who is it on the receive side?

For every transaction, there are two people involved. We have a money-laundering database, and we check every transaction against any crime activities. We have not been seeing any fraud activity online that has majorly affected us.

Q. And the person receiving the money has to know certain details about the transaction, correct?

A. Absolutely. There is a (code) that is issued only one time. The receiver has to know the details of the sender, plus this number.

Q. Anything else coming from Western Union that consumers should be aware of?

A. There is always a perception that Western Union has an old business model, but don't forget there are 29 transactions every second, and all of these transactions are done electronically. It's not like we carry it from one location to another location, cash in a suitcase.

Now what's happening is that instead of collecting cash, people are more and more using online or digital phones to carry out the transactions and, I believe in the future, also watches and other mobile devices.