Western Union 2015 Annual Report Download - page 141

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Regulatory initiatives and changes in laws, regulations and industry practices and standards affecting us, our agents or their
subagents, or the banks with which we or our agents maintain bank accounts needed to provide our services could require
changes in our business model and increase our costs of operations, which could adversely affect our financial condition,
results of operations, and liquidity.
Our agents and their subagents are subject to a variety of regulatory requirements, which differ from jurisdiction to jurisdiction
and are subject to change. Material changes in the regulatory requirements for offering money transfer services, including with
respect to anti-money laundering requirements, fraud prevention, consumer protection, customer due diligence, agent registration,
or increased requirements to monitor our agents or their subagents in a jurisdiction important to our business have meant and
could continue to mean increased costs and/or operational demands on our agents and their subagents, which have resulted and
could continue to result in their attrition, a decrease in the number of locations at which money transfer services are offered, an
increase in the commissions paid to agents and their subagents to compensate for their increased costs, and other negative
consequences.
Our regulatory status and the regulatory status of our agents could affect our and their ability to offer our services. For
example, we and our agents rely on bank accounts to provide our Consumer-to-Consumer money transfer services. We also rely
on bank accounts to provide our payment services. We and our agents are considered Money Service Businesses, or "MSBs,"
under the BSA, including our Business Solutions operations. An increasing number of banks view MSBs, as a class, as higher
risk customers for purposes of their anti-money laundering programs. Furthermore, we and some of our agents have had difficulty
establishing or maintaining banking relationships due to the banks' policies. If we or a significant number of our agents are
unable to maintain existing or establish new banking relationships, or if we or these agents face higher fees to maintain or
establish new bank accounts, our ability and the ability of our agents to continue to offer our services may be adversely impacted,
which would have an adverse effect on our business, financial condition, results of operations, and cash flows.
The types of enterprises that are legally authorized to act as our agents vary significantly from one country to another.
Changes in the laws affecting the kinds of entities that are permitted to act as money transfer agents (such as changes in
requirements for capitalization or ownership) could adversely affect our ability to distribute our services and the cost of providing
such services, both by us and our agents. For example, a requirement that a money transfer provider be a bank or other highly
regulated financial entity could increase significantly the cost of providing our services in many countries where that requirement
does not exist today or could prevent us from offering our services in an affected country. Further, any changes in law that would
require us to provide money transfer services directly to consumers as opposed to through an agent network (which would
effectively change our business model) or that would prohibit or impede the use of subagents could significantly adversely
impact our ability to provide our services, and/or the cost of our services, in the relevant jurisdiction. Changes mandated by laws
which make Western Union responsible for acts of its agents while they are providing the Western Union money transfer service
increase our risk of regulatory liability and our costs to monitor our agents' performance.
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