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Western Union Partners Amazon for Cash Payments Facility

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World’s leading money transfer company, Western Union Co. (WU - Free Report) and online retail giant, Amazon.com, Inc. (AMZN - Free Report) have come together to launch Amazon PayCode in the United States. This service, to be available in a few weeks, will enable Amazon’s customers pay for online purchases in cash at any of Western Union's 15,000 U.S. locations.

So far Amazon’s customers have been using Amazon Cash, which enabled them to load cash into their Amazon Balance for making online purchases. Following this partnership, PayCode, another cash payment mode has been introduced and is available in more than 100,000 cash-loading locations nationwide.

This service has been rolled out to address customers’ desire to pay in cash for their online purchases. Providing cash payment services at Western Union will make it easier for customers, given that nearly 80% of Americans live within five miles of the money transferor’s 15,000 locations. This will boost the number of customers for Amazon and consequently for Western Union.

This service is an extension of PayCode rolled out in 10 countries — Chile, Columbia, Hong Kong, Indonesia, Kenya, Malaysia, Peru, Philippines, Taiwan and Thailand— earlier this year. It enabled shoppers in these regions pay for Amazon items using local currencies. Consumers in these markets would go to Western Union outposts and pay for their purchases in cash.

To expand its business reach, Western Union has been making several tie ups and partnership with banks, retailers, post offices across the globe. These tie ups and partnerships are in line with the company's efforts to grow its market share amid rising competition from many fintech companies such as PayPal Holdings, Inc. (PYPL - Free Report) and Square Inc (SQ - Free Report) that have entered the payments space in recent years and are fast eating into the market share with their low cost and efficient services.  

Western Union has also streamlined its business operations by recent sale of three of its businesses– Speedpay, U.S. domestic bill pay business, Walletron, a provider of mobile bill presentment solutions and Paymap mortgage payments services.

Part of the funds generated from the above business will be used for sharebuyback and debt payoff, which will aid the company’s bottom line  and reduce its leverage.

The company's revenues have been under pressure. High compliance costs and foreign exchange volatility have further weighed on its profitability.
Year to date, its stock is up 23% compared with the industry 's growth of 18%.

Western Union carries a Zacks Rank #3 (Hold).

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