executive impact

Western Union: Moving money around the world

By Chris Betros

Anyone living in Japan who has ever wanted to transfer money overseas will certainly be familiar with the name Western Union. The company is a leader in global payment services; in 2015, it moved over $150 billion in 130 currencies for its consumer and business clients around the world.

Western Union has had a presence in Japan since 2010 and has developed a strong network covering over 220 Agent locations (as of Dec 31, 2015), over 21,500 Seven Bank ATMs, an online service for Seven Bank account holders and over 11,400 Famiport kiosks at FamilyMart – and its network continues to grow. The company recently announced an addition of over 6,300 K Station kiosks at Circle K Sunkus (CKSU) on Feb 22.

You can send or receive money in person at locations throughout Japan that can be sent from or collected in more than 500,000 Western Union Agent locations in over 200 countries and territories around the world. You can send a transfer of up to 1 million yen from an Agent location (subject to limitations of receiving country and other factors). And to make things even more convenient, neither the sender nor the recipient needs to open a bank account (excluding Seven Bank locations), and recipients do not have to pay a fee when they collect their money (FX gains apply).

Heading the operation in Japan is Eiji Kobayashi, Representative Director, who began his career at Western Union in February 2015. Prior to joining Western Union, Kobayashi, who is fluent in English, held executive roles in several financial institutions, including American Express International, Inc, Lehman Brothers, Deutsche Bank and Credit Agricole in Tokyo as well as Merrill Lynch and Goldman Sachs in New York. He is a graduate of Brown University and has an MBA degree from the University of Chicago.

Japan Today visits the Western Union office in Tokyo’s Toranomon area to hear more about the business.

How well known is Western Union in Japan?

Japan is a very important market for Western Union. We’ve been in Japan since 2010, but we could be better known. Foreign residents certainly know us and what we do very well. I think the lack of awareness among Japanese relates to the fact that the money transfer business being allowed by non-bank entities is still relatively new to Japan. It only started six years ago, so Japanese people generally don’t know that these services are available.

What is your strategy to grow the business?

We will focus on expanding the number of Agent locations, meaning face-to-face retail locations. Currently, we have over 220. A second strategy is to have our service become available at more ATMs, such as at Seven Bank outlets. Third, we plan to have more kiosks – terminals (not ATMs) at convenience stores. Those are our three key channels for growth. Seven Bank, FamilyMart and CKSU are increasing the number of locations, so that is organic expansion which helps us. We are also building relationships with other Agents because we want to have a greater presence, including outside major cities.

How many languages do your Agent locations provide services and advice in?

Western Union can currently support services in nine languages – Japanese, English, Chinese, Tagalog, Spanish, Portuguese, Thai, Indonesian and Vietnamese.

How do you market the company in Japan?

Our marketing campaigns are aimed at the foreign population, especially people from China, the Philippines, Thailand, Vietnam and Brazil, who are working in Japan and sending money back to their families. We target these segments by sponsoring or participating in events like the Chinese New Year, for example. We also do digital marketing, taking advantage of our global platform.

Tell us about the SMS service that you launched last December.

It is a personalized service. When someone sends money from Japan overseas, the funds are picked up by the receiver at a Western Union location. When sending a payment, you include your mobile phone number on the money transfer application form and you will be sent an SMS notification message automatically when the money has been collected We do not charge the sender for the SMS service, and most mobile phone networks in Japan support the SMS service, including NTT DoCoMo, SoftBank and au.

How do money transfers work with ATM and kiosks?

Seven Bank offers the transfer service to account holders, with access to online 24 hours a day from your PC and the option to save remittance details for up to 12 recipients. You can open a Seven Bank account online, through their customer center or at one of their branches, and apply for the International Money Transfer Service at the same time. Transfers of up to 1 million yen can be sent from a Seven Bank account.

You can also use the money transfer service at FamilyMart and CKSU kiosks at more than 17,700 branches of convenience store nationwide, and send up to 300,000 yen at FamilyMart or 100,000 yen at CKSU in a single transfer. Again, there is no need to set up a bank account – simply pay in cash at the kiosk to send money easily. However, you will need to pre-register.

What about when we use an Agent?

There you simply fill in a form and pay with cash the amount you wish to send and the transaction fee. You will receive a 10-digit money transfer control number (MTCN) to share with the person you are sending a payment to. Minutes later, they will be able to collect the money at a retail location.

How does one receive money in Japan from someone overseas?

It is easy to receive money. You receive a text message or a phone call from the sender informing you that they have sent money. They give you the MTCN that a sender receives when the transaction is completed. The sender lets you know it and you go to a Western Union Agent location in Japan, show your ID and the number and you receive your funds.

What is Western Union doing to make sure money isn’t being transferred for illegal purposes?

You are limited on how much money you can send and how many times in a day you can send. Western Union has developed and continues to enhance its global compliance programs, including its anti-money laundering program comprised of policies, procedures, systems and internal controls to monitor and to address various legal and regulatory requirements. In addition, we continue to adapt our business practices and strategies to help us comply with current and evolving legal standards and industry practices, including heightened regulatory focus on compliance with anti-money laundering or fraud prevention requirements. As of December 31, 2014, these programs included approximately 1,900 dedicated compliance personnel, training and monitoring programs, suspicious activity reporting, regulatory outreach and education, and support and guidance to our agent network on regulatory compliance. In 2014, the company spent over $180 million on its compliance and regulatory programs.

What is a typical day for you?

I come to the office at 9 a.m. Most of my day is spent on internal meetings and business reviews. I try to go out and see Agents and retail locations whenever I can to discuss the business and find out how we can further improve our service. I also inform them of the latest developments and innovations Western Union is planning on and seek out further opportunities to collaborate to grow the business.

© Japan Today

©2020 GPlusMedia Inc.

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Are 7 Banks linked to other banks? I have never seen one.

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Not as high as pay-pal though, I just got hit with a 35,000 yen charge on a payment that was made to me today! I almost spit out my coffee when I saw it.

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Considering the transaction fee and exchange rates Western Union is somehow expensive. The company also needs to make more cash desks available.

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