it will take maybe 30 seconds? These people are already using their mobile phones for a lot of things—that is their life, they’re in a taxi, and suddenly they can do money transfer. The use case is obvious for them.
So when we look at our business we don’t look at it only from a U.S. perspective. It’s not about building tools that will be used in New York or San Francisco or Paris, it’s about the customer in Ghana or Kenya or Malaysia and what they will need in the digital space to make their businesses work, to send money, to receive money, to pay bills. I tell people, when you come here in the morning, make sure you have your passport—make sure you are talking and thinking about your customer in China or India or South Africa.
X: You joined Western Union back in 2002. What did the business look like back then?
FK: If you look at the business in 2002, we had less than 200,000 locations. We had an extremely solid platform that could move money from point to point across the world in minutes, and it worked in 190 countries. We had an extremely strong six-sigma culture, with Hikmet’s background at GE, and that meant executing a service for the customer had to be simple and flawless. We had a platform for moving money across 16,000 corridors—two-way connections like U.S. to Ghana or France to Morocco—in 135 currencies with agents who might be banks or postal offices or retail agents. And we had to make sure we were complying with all of the regulations in all of the countries, and actually in pairs as well, since the regulations can change depending on where you are sending to and from.
So that is the foundation of everything else we have done. Since then we have grown to more than 500,000 locations. I’m proud to say that in some of the countries I mentioned you can’t drive more than a minute without seeing a Western Union sign.
X: But I’m guessing that the underlying technology for all these corridors was not Web or Internet technology—more likely it was some kind of proprietary electronic data interchange system, right? How well were you positioned to adapt to the Internet and the mobile revolution?
FK: We do have this extraordinary platform that is the hub for moving money across the world from point to point. If you go back many years, that hub was based on a very simple technology, and when I started in 2002 we were still doing that. Say you you walked into a location in New York City and you said, “I want to send $300 to Kumasi, Ghana.” The guy in the location would pick up the phone, call the Western Union call center, and say, “Hi, I am X and here is my ID and I have just taken $300 from this customer and he wants to send it to Y in Kumasi.” The call center would log the information. On the other side, the person in Ghana would go to any location in Kumasi and the agent there would pick up the phone and call the call center and say, “Hi, I have somebody here who says he wants to pick up the transaction, and here is the number,” and the call center would say, “Yes, you can pay him.” Done.
Of course, that evolved into having a terminal in the two locations that would connect to our hub in various ways. It could be through a telephone modem over a dialup connection, or any form that was available. Then it evolved some more and we started using the Internet as the primary way of connecting. But it’s still the same thing: it’s connecting to a host that is doing all the work, with a relatively thin application at the point of sale. Today most of our applications are browser-based, and we have an extremely powerful system for routing a transaction anywhere in the world in a matter of minutes, while making sure we comply with regulations about money laundering and how much money you can move. At the end of the day, money transfer relies on that very solid core system that can transfer money across 200 countries in 135 currencies.
X: Not long after the rise of PayPal, we saw the advent of other Silicon Valley companies like Xoom that were explicitly out to disrupt Western Union in the area of international money transfers. Is keeping those competitors in check part of the idea behind WU Digital?
FK: Of course, we are always looking at the competition, but I wouldn’t say that it’s Xoom or PayPal or anyone in particular. I’m looking at each one and making sure I understand what the competition might be doing that is better than me in terms of addressing customer needs. So what is driving our investment and our strategy is the customer. Xoom has their own business and has been around for some time, but are they disrupting our business? You can look at the facts—today we have an online presence in 23 countries. No one else has that, not Xoom, not any of the other competitors that I know. Globally we have
