In an interview with Bloomberg, CEO Hikmet Ersek expressed a willingness to incorporate bitcoin into Western Union’s portfolio of world currencies “once bitcoin is regulated like a proper currency.” Perhaps even the world’s premier money transmitting service is coming around to bitcoin.
But Ersek seems to find this a significant “if.”
Western Union is the world’s largest money transmitting service. It deploys over 500,000 agents and 100,000 ATMs internationally. In an interview with Bloomberg, Ersek discussed the future of Western Union as it faces the spread and adoption of new technologies. and the competition from Paypal and other fresh startups. They also discussed the security concerns of transmitting large amounts of money across the globe.
Bloomberg asked for his stance on bitcoin’s potential as a currency, drawing attention to Western Union’s high fees. While Western Union fees tally up to something around 10%–although it varies by country–Bitcoin boasts something closer to 1%. “How much of a threat is Bitcoin, which is clearly much cheaper to move across the globe?” she asked.
“We pay out and settle in 121 currencies…. Once bitcoin should be regulated … like a proper currency, why not should we also use bitcoin? I mean if the customer wants to use bitcoin and it’s regulated–”
The host cut him off with an excited wave. “Whoa, back up.” she said.
But he smugly hesitant to call bitcoin a currency. “If it’s regulated as a currency. But it’s not regulated like a currency.” He repeated, “But if it’s regulated and the customers want that, why not we do it?”
When asked about his expectations of Western Union picking up bitcoin as the 122nd currency, he responded, “I’m not sure if bitcoin is a currency. Bitcoin is a system… it’s defined as an asset. It’s not issued by a reserve bank like dollars are issued by a reserve bank. It’s a regulated environment. Bitcoin does not have that.”
Ersek also defended the price of Western Union’s services, pointing to the costs of exchange rates and turning money into various currencies. The company spends billions of dollars on customer protection and security.
Ersek seems skeptical, if open, to adopting bitcoin. Earlier this year in a Fortune editorial he outlined many of the obstacles to widespread adoption, particularly in developing countries, but he never dismissed the burgeoning tool. He asked some questions about its immediate prospects. Unwilling to write Western Union off as an imminently antiquated service, he defended its role in the current economy. Ersek wrote:
“And a primary question remains — do such innovations, as we know them today, address the needs of consumers and businesses on both sides of an international transaction? In its current form, the answer is no, but there’s potential, and that is something I am watching with great interest.“
“Without continued enhancements to ensure consumer protection, which ultimately translates to increased reliability, I believe consumers and businesses will continue to gravitate to cash, bank accounts, and cards.“
Bitcoin could disrupt finance. As the economy evolves with bitcoin crawling around and expanding inside it, it could ultimately tip over financial giants that don’t adapt. Western Union certainly isn’t at the frontier of bitcoin adoption, but the CEO appears to be hesitantly open to evolving with the times.
Featured image by Shutterstock.
Last modified: June 14, 2020 9:30 AM UTC