Western Union 2015 Annual Report Download - page 111

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Distribution and Marketing Channels
We offer our Consumer-to-Consumer service to consumers around the world primarily through our global network of third-
party agents in most countries and territories, with approximately 90% of our agent locations being located outside of the United
States. Our agents facilitate the global distribution and convenience associated with our brands, which in turn helps create demand
for our services and helps us to recruit and retain agents. Western Union agents include large networks such as post offices, banks
and retailers, and other established organizations and smaller independent retail locations that provide other consumer products
and services. Many of our agents have multiple locations. Our agents know the markets they serve and work with our management
to develop business plans for their markets. In some regions, our agents contribute financial resources to, or otherwise support,
our efforts to market the business. Many agents operate in locations that are open outside of traditional banking hours, for example
on nights and weekends. Our top 40 agents globally have been with us an average of approximately 20 years and in 2015, these
long-standing agents were involved in transactions that generated approximately 60% of our Consumer-to-Consumer revenue.
No individual agent accounted for greater than 10% of the segment's revenue during all periods presented.
We provide our third-party agents with access to our multi-currency, real-time money transfer processing systems used to
originate and pay money transfers. Our systems and processes enable our agents to pay money transfers in more than 130 currencies
worldwide. Certain of our agents can pay in multiple currencies at a single location. Our agents provide the physical infrastructure
and staff required to complete the transfers. Western Union provides central operating functions such as transaction processing,
settlement, marketing support and consumer relationship management to our agents, as well as compliance training and related
support. Some of our agents outside the United States manage subagents. We refer to these agents as superagents. Although the
subagents are under contract with these superagents (and not with Western Union directly), the subagent locations typically have
access to similar technology and services as our other agent locations. Our international agents often customize services as
appropriate for their geographic markets. In some markets, individual agents are independently offering specific services such as
stored-value card payout options or Direct to Bank service. While we typically perform services under the Western Union brand,
in certain geographic regions, we operate under other brands targeted to the local market.
We market our services to consumers in a number of ways, directly and indirectly through our agent partners, leveraging
promotional activities, grassroots and digital advertising, and loyalty programs. Our marketing strategy includes our consumer
programs, such as "My WUSM" and "Gold Card," which are available in many countries and territories. These programs offer
consumers faster service at the point-of-sale. Additionally, in certain countries and at westernunion.com, consumers can earn points
that can be redeemed for rewards, such as reduced transaction fees or cash back; however, such redemption activity has been
insignificant to the results of our operations.
Industry Trends
Trends in the cross-border money transfer business tend to correlate to migration trends, global economic opportunity and
related employment levels worldwide. Another significant trend impacting the money transfer industry is increasing regulation.
Regulations in the United States and elsewhere focus, in part, on anti-money laundering, anti-terrorist financing and consumer
protection. Regulations require money transfer providers, banks and other financial institutions to develop systems to prevent,
detect, monitor and report certain transactions. Such regulations increase the costs to provide money transfer services and can
make it more difficult or less desirable for consumers and others to use money transfer services, either of which could have an
adverse effect on money transfer providers' revenues and operating profits. For further discussion of the regulatory impact on our
business, see the "Regulation" discussion in this section, Part I, Item 1A, Risk Factors, and the "Enhanced Regulatory Compliance"
section in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. Additionally,
our ability to enter into or maintain exclusive arrangements with our agents has been and may continue to be challenged by both
regulators and certain of our current and prospective agents. Further, we are seeing increased competition from, and increased
market acceptance of, electronic, mobile, and Internet-based money transfer services as well as digital currencies.
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