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Better 2021 Expected By Western Union After Covid-19 Hit To Business

Better 2021 Expected By Western Union After Covid-19 Hit To Business
With people adjusting to the new normal created by the novel coronavirus pandemic and the expectations that the United States government would soon pass the additional stimulus to help the economy, an improved outlook for 2021 was forecast by Western Union, the largest money transfer company of the world,
The chief financial officer of the company said that with the slowing down of new migration of workers and the return of the existing workers back to their country of origin after having lost their jobs, there was a significant drop in remittance flows so far this year which forms a vital source of external financing for developing countries.
Third quarter revenue of $1.3 billion, compared to an estimate of $1.25 billion of Refinitiv IBES, was reported by Western Union which relies heavily on such transfers for its business. The company also reiterated its financial outlook for the 2020 financial year while estimating generally accepted accounting principles (GAAP) earnings per share to be in the range of $1.72 and $1.77.
"Generally, I would expect a better 2021 than we saw this year," Raj Agrawal the chief financial officer of the company said in a media interview.
"At least here in the US, we should get some economic stimulus. The election will be behind us, all of these things will help the US, which is a big part of our business, and I do think people have learned to live a little bit more with the pandemic and we will see better times next year," Agrawal said.
For the entire of 2020, remittance flows us expected to see a drop of 7 per cent to $666 billion globally followed by a further drop of 7.1 per cent in 2021, according to the World Bank. In April this year, the World Bank had estimated an almost 20 per cent drop in remittance flow and in comparison to that forecast, the latest estimates were much less severe.
During the third quarter, a recovery in Western Union's retail business was aided by an overall easing of restrictions and lockdowns imposed by governments to prevent the spread of the pandemic. Additionally, a faster than expected growth in its digital business, which includes money sent via the internet, mobile or its digital partners, had also helped the company rebound during the quarter.
Agarwal said that a growth rate of between 40 and 50 per cent has been recorded by the digital business of Western Union in the last two quarters. He added that around 21 per cent of total consumer revenue of the company is accounted for by revenues from its digital business while retail business makes up the rest 79 per cent.

Christopher J. Mitchell

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