Western Union Takes Direct to Bank Remittance to Mexico

World’s leading money-transfer company, Western Union Co. (WU), announced that it will provide its Direct to Bank service from the U.S. to Mexico, through Grupo Financiero Banorte’s UniTeller network.

The news, however, failed to boost the share price. Shares lost about 4.5% in the last two trading session largely brought by decline in the broader market indices.

Coming back to the new initiative, the service enables a consumer to send a transaction from an agent location directly to a bank account. Globally, the company has ties with a number of banks that have agreed to this service, primarily through their online banking portals.

The service will now be available in Mexico. For customers in this region, money remitted from the U.S. via westernunion.com, smart phones or retail agent locations will now be directly transferred to their bank account.

The service is likely to be operational in the first quarter of 2015. More than 60 million individual bank accounts under UniTeller network, covering top banks in Mexico, will be benefitted by the service.

While most Mexicans are bent on receiving their remittance in cash, customers have recently started looking for alternate remittances. Western Union is also aggressively seeking to make its Direct to Bank service available to more agent locations in new countries. It already offers direct-to-bank services in 50 countries. Out of these, seven countries rank among the world’s top 10 remittance receiving countries. These are India, China, Philippines, Egypt, Pakistan, Bangladesh and Vietnam.

Western Union currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Green Dot Corporation (GDOT), Alliance Data Systems Corporation (ADS) and Global Payments Inc. (GPN). While Green Dot sports a Zacks Rank #1 (Strong Buy), the other two carry a Zacks Rank #2 (Buy).