Western Union expands to LATAM by acquiring Te Enviei

As part of its renewed purpose-driven strategy, Western Union is expanding its value proposition to customers by offering a broader set of digital financial services. By introducing its digital wallet in Brazil, Western Union plans to enable its customers to store funds, send money overseas and domestically, and pay their bills – all from the convenience of their phones.

Company officials have admitted that offering their Brazilian customers an integrated digital banking and money transfer solution will be a key milestone in their efforts, as the acquisition accelerates their planned technology build, allowing for a faster roll out of their digital wallet in Brazil.

Brazil is an important market where Western Union already holds a banking license, and it is a digitised banking market. Therefore, The Brazil launch, expected in the first half of 2023, is part of Western Union’s broader shift to offering greater value to customers.

Western Union’s developments in Latin America

Remittances are a USD 100 billion industry in Latin America, with money traditionally coming to the region from the US and Europe. But the unprecedented level of intraregional migration is fostering completely new corridors, with flows now originating from countries like Costa Rica and Chile.

Western Union saw the potential and brought, from one year to another, new services in Latin America. In 2020, the company announced a partnership with Banco SEMEAR in Brazil to offer the WU GlobalPay for financial institution platforms. It has since provided the benefits of international payment services without the need to invest in new banking systems infrastructure.

In 2022, it had a few developments in Mexico, starting with an agreement with ecommerce giant MercadoLibre to allow digital remittances to Mexico. It means that customers from Mexico don’t have to physically go to a Western Union point and pick up the funds themselves but can cash in at any point that accepts Mercado Pago, including major chains like McDonald’s, Domino’s Pizza, and Starbucks.

Another partnership, with PagaPhone this time, allows customers in the US to send money via any Western Union channel including WU.com, the mobile app or at any Western Union retail location to Mexico. Recipients can then receive the funds over their phone using their PagaPhone SmartPay account.

Digital financial trends across Latin America

With the advent of giant neobank such as Nubank and the presence of more than 30 neobanks in the region, Latin America started a switch from omnichannel to unichannel.

All-in-one banking apps are both the trend and the goal. For this reason, all the new banks are branchless, and most operations must be performed through their proprietary app only, which is also more secure and immediate. The success of this strategy can be shown by the large adoption and usage of neobanks accounts as more than 50 million customers are using their services. The unichannel approach is also aligned with what the central banks are trying to push in the region via digital payments.

Payments are another key area of innovation, with the government, in particular, backing the expediency of these technologies. The reason for this being that the adoption of cash has made it difficult for the government to tax, prevent fraud, counterfeiting, and money laundering.