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Western Union to utilize vast network to stifle threat from banks
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Vijay Raj Poduval in his office in Jakarta on Sept. 10. (JP/Anton Hermansyah)
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estern Union, the world's largest money transfer company, will utilize its vast network with mini markets, logistics companies, post offices and financial institutions in Indonesia to maintain its advantage over the new expansion of banks into the business.
The US-based firm manages a thriving remittance business from Indonesian migrant workers, totaling US$8.34 billion and $9.15 billion in 2014 and 2015, respectively. The potential of the market encouraged banks such as BNI and Bank Mandiri to enter the business.
"It is a challenge, but we have our own space in the remittance business. Our biggest strength is in our network. We are closer to customers in terms of location," country director for Western Union Indonesia Vijay Raj Poduval told The Jakarta Post in his office in Jakarta on Thursday.
The operating hours of minimarkets and the company’s associated logistics points are more extensive than those offered banks, he further added. Currently, the service can also send remittances into a bank account using the network as well.
"We are working with Bank Woori and Bank Saudara. We send the remittances to them and they can send them to the banks. It is an efficient model," Vijay said.
The world's global remittance business was worth $586 billion in 2015. Western Union has a global market share of 14 percent. In the first half of 2016, the Indonesian remittance business reached $4.5 billion, mostly from Malaysia (30.94 percent), Saudi Arabia (29.33 percent) and Taiwan (9.52 percent). (ags)
