Thread: Western Union money transfers

Immigration hurt money transfer business
New Mexico Business Weekly - 5:44 PM MDT Fridayby Renee McGawDenver Business Journal
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Controversy over illegal immigration hurt Western Union's business in the second quarter, as immigrants in the United States became less willing to send money to their families in Mexico, the chief executive of Western Union's parent company, First Data Corp., said Friday.

"We estimate that the U.S. immigration activities in the second quarter negatively impacted Western Union's total revenue growth by 2 percent and total operating profit by 3 percent," said Ric Duques, CEO of Greenwood Village-based First Data (NYSE: FDC), in a conference call with analysts.


He said the well-publicized efforts by lawmakers to crack down on illegal immigration and tighten the U.S. border with Mexico had frightened both legal and illegal immigrants away from money-transfer offices.

"Most of these migrants come to the United States to find work and in many cases send money back to their family," Duques said. "The last thing these people want is to find themselves a target of controversy or suspicion. Even those in this country legally may now have concerns about their paperwork or undocumented family members."

Fear of harassment and arrest are prompting many migrants to hang onto their cash, Duques said.

"In May and June, more than 2,000 migrants were arrested across the United States," he said. "You can imagine the ripple effect that these arrests are having on the community... It's inconceivable that these developments would not have an impact on money transfer industry."

Mexico's central bank, Banco de Mexico, reported remittance transaction growth of 14 percent for April and May, down eight percentage points from 22 percent growth rate in the first quarter, Duques said.

First Data experienced a noticeable decline in transaction growth across all three of its money transfer brands -- Western Union, Orlandi Valuta and Vigo, Duques said.

Total Mexico transactions excluding Vigo grew 6 percent, compared with 17 percent growth in the first quarter, he said. Western Union-branded transactions to Mexico, excluding Orlandi Valuta and Vigo, increased 10 percent, compared with 23 percent in the first quarter. And Western Union's domestic money transfer business, including Latinos within the United States, grew 5 percent, compared with 5 percent growth in the first quarter, Duques said.

On Thursday, First Data reported earnings of $436 million, or 56 cents per share, up from $391.9 million, or 50 cents per share, in the same quarter a year earlier.

The company reaffirmed its previous full-year guidance of $2.35 to $2.42 per share, but said that it might come in at the lower end of that range if immigration issues continued to hurt Western Union business.

First Data plans to spin off the Western Union business in the late third quarter or early fourth quarter.



This story compiled by Jeff Clabaugh, staff reporter, Washington Business Journal, an affiliate publication, and the New Mexico Business Weekly.
http://washington.bizjournals.com/albuq ... ily22.html
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Guess Western Union will be making a trip to DC to get more laws changed to suit them!

Why do those here legally have concerns about their paperwork? If they are legitimate there should be no worry. Now this does look like an opportunity for officials to catch illegals.

First Data is a mega company here in Colorado. I have two friends who USED to work there, until First Data decided to eliminate their jobs.

I somehow can't come up with any real sympathy for these people!!!

This is good news, an indication that a little action has huge impact on these criminals who are exporting American wealth

Good Western Union and many others that wire cash have been making money hand over fist with these illegal aliens sending cash back home. It is good that their home countries and families should feel the effects and consequences as well