How does Western Union work

Although it has millions of customers worldwide, very few people know how Western Union, the largest remittance company on the planet, works.

Founded in 1871, Western Union began serving individuals, merchants, and entrepreneurs who wanted to send money to their families or associates in remote parts of the United States, but did not have access to bank services.

Thanks to Western Union, an individual or business could go to a local office and request that a certain amount of money be sent to someone else in some remote location.

It was only necessary to deliver the money to be sent at the box office and wait for the operation to be notified to the destination office through a telegraph system.

The receiver only had to go to that office and there the money was delivered in cash.

The appeal of this service is that it was more accessible and faster than sending through a commercial bank, something that was not available to many in the 19th century.

Western Union currently operates in a similar way, but using the Internet to send money between offices and customers in more than 200 countries on five continents.

Who are Western Union’s main customers?

The speed and relatively low cost of the Western Union service has served to attract a customer base that is 80% made up of immigrants who wish to send remittances to their families in their countries of origin.

In 2017 alone, Western Union sent more than $15 billion from the United States to Latin America, Europe, and Asia.

Within Europe, the case of Germany stands out, from where Western Union made transfers for more than 9,000 million euros in 2016, to countries such as Turkey, Russia, Spain, Italy and several African nations.

Western Union franchised system

In addition to its own offices, Western Union relies on a large chain of small establishments or businesses that acquire the right to operate a remittance office.

For example, in Latin America and Europe it is common for Western Union services to be provided by travel agencies, value transport companies or commercial banks that offer them as an added value to their customers.

How do you send money by Western Union?

Money transfers can be made in person at an affiliated office or business, over the Internet through the Western Union portal in the country of origin, or through a smartphone application.

In general terms, the step to follow is the following:

  • Choose the delivery method (office, internet or app)
  • Identify yourself and indicate the amount of money you want to send.
  • Indicate the method of payment of the money to be sent (transfer, check, cash or credit card)
  • Identify the person who will receive the shipment and the office closest to your place of residence or work.

Once the operation is done, in the case of the United States, the money can be received practically immediately by the recipient.

In international shipments there may be a wait of between 2 to 24 hours, depending on the regulations in force in the country of destination, working hours and other external factors.

Like any for-profit company, Western Union earns a small commission of up to 15% for every money transfer made worldwide.

This commission varies from country to country and is calculated based on the amount of money sent, the form of payment made by the issuer, and the withdrawal method that the recipient will use.

In addition, Western Union does not pay for shipments at the most favorable exchange rate (for the client) among the 130 national currencies with which it works.

This is because of their profits are obtained from playing with the exchange rate differential of the currencies.

For this reason, before sending money it is advisable to consult the Western Union cost and fee calculator to avoid unpleasant surprises.