Western Union

Topics: Corporate social responsibility, Economics, Financial services Pages: 7 (2382 words) Published: May 4, 2011
May 3, 2011
May 3, 2011
Western Union in 2008: Send Me The Money!
Western Union in 2008: Send Me The Money!

Current Situation
Western Union was founded in 1851 and started its history as a telegraph and wire services company. In 2006, Western Union discontinued its telegraph service and focused exclusively on money transfers (Pearce & Robinson, 2011). Jorge Ochoa, Vice President of Finance and Raul Duany, Director of Corporate Communication joined The Western Union Company (WU) in November 2008. The primary customers for money transfers were immigrants that were seeking better opportunities in richer countries away from their home. When immigrants leave their home countries, they often leave behind family members who depend on them for financial support. This is most true in the case of poorer countries. Government regulators scrutinized the operations and fee-charging practices of money transfer businesses. Western Union is a leader in global money transfer, providing people with fast, reliable and convenient ways to send money around the world. The Western Union brand is globally recognized. Their services are available through a network of over 375,000 agent locations in more than 200 countries and territories (Western, 2009). Their consumer-to-consumer money transfer service enables people to send money around the world in minutes. Their consumer-to-business service provides consumers with flexible and convenient options for making one-time or recurring bill payments. Western Union believes that the brand strength, size, and reach of their global network, along with the convenience and reliability to their consumers have been essential in the growth of the business. As they continue to meet the needs of their consumers for fast, reliable, and convenient money transfer services, they are also working to enhance their services and provide their consumers with access to an expanding portfolio of payment and other financial services. The federal law known as the Community Reinvestment Act (CRA) obligates federally insured banks and depository institutions to help meet the needs of communities in which they operate (Pearce, & Robinson, 2011). In March 2007, Federal Reserve chairman Ben Bernanke stated, “the CRA reaffirmed the long-standing principle that financial institutions must serve the convenience and needs of the communities in which they are charted” (Pearce & Robinson, 2011). Western Union serves many of the financial needs of immigrant populations, as a bank might, with a major presence in poor and racially diverse neighborhoods. Western Union is now being held up to the same standards as banks because they are both financial institutions. Western Union’s customers are mostly urban and poor. The typical user of its remittance service is a low-wage immigrant worker who lives in Urban America, makes $15,600 annually and sends home $293 a month, almost 30% of his or her net monthly income (Pearce & Robinson, 2011). Heavy charges in the money transfer industry places economic burden on low-income immigrant families in the United States and in their communities of origin while creating and increased reputation risk for Western Union (Pearce & Robinson, 2011). Western Union has been facing numerous lawsuits, mainly because of their lack of social responsibility. This has affected the company’s image and could potentially increase the risk that Western Union faces in the competitive market. Corporate Social Responsibility

Corporate social responsibility is generally perceived as a positive business ideology in the 21st century, despite some challenges. A significant expansion of basic business ethics, CSR establishes guidelines for ethical and socially responsible behavior. It addresses how companies that want to satisfy government and societal requirements should treat key stakeholder groups, including customers, suppliers, employees and the community (Mal Warwick...
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