How Western Union is using gig-economy tech to be more like a bank – American Banker

Marqeta is bringing its experience in powering the technology behind gig-economy giants to Western Union, which can use the partnership to create a more cohesive menu of online services in Europe.

Marqeta will integrate its card-issuing technology with Western Union’s multicurrency digital wallet and banking platform in Europe. This will allow Western Union’s entire remittance service to be offered online, with funds distributed to a physical or virtual Visa card.

Western Union will connect with Marqeta through an application programming interface that supports card issuing, payment processing, data gathering and analysis of a consumer’s card activity. That would expand on Western Union’s prepaid card, which is part of a partnership with NetSpend. 


“This partnership connects geographies and makes money movement an easier thing to achieve,” said Marqeta’s Anna Porra.


“This is not the first time at bat for Western Union,” said Tim Sloane, vice president of payments innovation at Mercator Advisory Group. It offered links to a digital card as early as 2011 for international payments, he noted. 

The Marqeta collaboration has the potential to more closely resemble banking, Sloane said. “This is maybe different if it really is more like a bank account.”

Marqeta, which provides payment technology for Uber, DoorDash and Block, has grown over the past few years by enabling firms to use payments as the gateway to other financial services,  making it active in the trend toward “super apps.” 

The Western Union partnership is Marqeta’s initial foray into remittances, and it comes as the global transfer market recovers from the pandemic and Western Union accelerates its diversification into automated transfers and digital banking. 

“This partnership connects geographies and makes money movement an easier thing to achieve,” said Anna Porra, director of strategy for Marqeta Europe. “There are huge flows and opportunities in these markets.”

The Western Union-Marqeta product’s ability to analyze consumer data and to be customized for users can enable broader use cases beyond peer-to-peer transfers, according to Marqeta. “This is a data play, a relationship play and a continuity play for Western Union and its users,” Porra said. “The transaction doesn’t stop once the remittance is complete.” 

Western Union faces competition from blockchain-powered companies such as Ripple, which uses distributed ledgers to add speed to international transfers and e-commerce payments by removing correspondent banks that manage foreign exchange and local compliance. Wise, the London fintech formerly known as TransferWise, has worked with Google to build an international payment service; another London-based fintech, Revolut, has used remittances as a way to expand to new markets such as the U.S.; and PayPal’s Xoom enables U.S. customers to send funds directly to bank accounts.

Western Union’s traditional rival, MoneyGram, earlier this year was taken private, a move seen as a way for MoneyGram to add digital payments options more rapidly without the pressure to meet the earnings expectations of a publicly traded company. 

“Our recent digital banking platform launch in a handful of countries in Europe is an example of how we are reorientating our business around the customer, the relationship we hold with that customer, and how we can serve that customer in new and expanded ways,” a Western Union spokesperson said in an email.

The market for remittances is growing and expected to resist economic pressures and the effects of Russia’s war with Ukraine. Officially recorded remittance flows are expected to increase 4.2% in 2022, to $630 billion, following an 8.6% increase in 2021, according to the World Bank. Remittances to Ukraine are expected to rise by more than 20% in 2022, though remittance flows from Russia to central Asian countries are expected to fall rapidly.

During and after the pandemic, as remittances and other peer-to-peer transfers have become increasingly digital, Western Union has expanded its ability to move funds to wallets and other accounts in real time, according to Molly Shea, head of North America for Western Union, who spoke at American Banker’s recent Payments Forum.

Western Union has partnered with card networks, banks and technology companies to reach areas where Western Union does not have access.

“We have to be one step ahead,” Shea said during the conference. “How do we anticipate where the demand will be next week? The more you can collaborate, the sooner you will be able to go to market.”

The Marqeta-Western Union collaboration will launch in Germany and Romania, with plans to expand across Europe. Western Union and Marqeta did not comment on expansion outside of Europe, and did not answer questions about the impact of the Russia-Ukraine conflict on specific remittance corridors. 

“This helps Western Union expand its digital offering, and has consumers start spending on that card. There’s a lot of data that Marqeta can help capture in real time,” Porra said. “This complements its mission to scale across these countries.”

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