Western Union 2013 Annual Report Download - page 118

2013 FORM 10-K
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In a typical money transfer transaction, a consumer goes to one of our agent locations, completes a form specifying, among
other things, the name and address of the recipient, and delivers it, along with the principal amount of the money transfer and the
fee, to the agent. In some jurisdictions, the agent collects the principal and fees after the presentation of a disclosure that generally
identifies the exchange rate and all fees and charges associated with the transaction and the consumer has agreed to the transaction,
as described in the disclosure. Certain of these processes are streamlined for our customers who participate in our loyalty programs.
The sending agent enters the transaction information into our money transfer system and the funds are made available for payment,
usually within minutes. The recipient enters an agent location in the designated receiving area or country, presents identification,
where applicable, and is paid the transferred amount. Recipients generally do not pay a fee. However, in limited circumstances,
a tax may be imposed by the local government on the receipt of the money transfer, or a fee may be charged by the receiver's
institution related to the use of an account. We determine the fee paid by the sender, which generally is based on the principal
amount of the transaction and the send and receive locations.
We generally pay our agents a commission based on a percentage of revenue. A commission is usually paid to both the agent
that initiated the transaction, the "send agent," and the agent that paid the transaction, the "receive agent." For most agents, the
costs of providing the physical infrastructure and staff are typically covered by the agent's primary business (e.g., postal services,
banking, check cashing, travel and retail businesses), making the economics of being a Western Union agent attractive. Western
Union's global reach and large consumer base allow us to attract agents we believe to be of high quality.
To complement the convenience offered by our network's global physical locations, in certain countries we have also made
our services available through other channels, as described below under "Services."
Over 85% of our Consumer-to-Consumer transactions involve at least one non-United States location. No individual country
outside the United States accounted for greater than 7% of this segment's revenue during all periods presented.
Services
We offer money transfer services in more than 200 countries and territories. In 2013, the substantial majority of our Consumer-
to-Consumer transactions were cash money transfers involving our walk-in agent locations around the world. Although demand
for in-person, cash money transfers has historically been the strongest, we offer a number of options for sending and receiving
funds that provide consumers convenience and choice. The different ways consumers can send or receive money include the
following:
Walk-in and telephone money transfer service. The substantial majority of our remittances constitute transactions in which
cash is collected by the agent and payment (usually cash) is available for pick-up at another agent location, usually within minutes.
In certain countries, we also offer convenience to our consumers to initiate a transaction through the phone using a debit or credit
card or through our account based money transfer service, as described below. Additionally, in a few select markets, we offer
consumers a lower-priced next day delivery service option for money transfers that do not need to be received within minutes.
Online money transfer service. Western Union branded websites allow consumers to send funds online, including through
mobile devices, generally using a credit or debit card for pay-out at most Western Union branded agent locations around the world.
As of December 31, 2013, we were providing online money transfer service through Western Union branded websites in over 20
countries.
Account based money transfer service. We offer services that allow consumers to initiate a money transfer from an account
or direct a transfer to be received in an account. These services include allowing consumers to initiate a Western Union money
transfer electronically through their bank’s internet banking service or automated teller machines (“ATMs”), without having to
visit a physical Western Union agent location. Also, in certain countries, receivers can choose to be paid through credit to their
accounts, and in the United States and other countries we provide a "Direct to Bank" service, enabling a consumer to send a
transaction from an agent location or our websites into an account in a number of countries.
Money transfer services through electronic channels, which include online, account based, and mobile money transfer,
combined were approximately 5% of consolidated revenue for the year ended December 31, 2013.