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Western Union Money Transfers Just Got Cheaper

The Western Union Company (NYSE:WU) has announced that it would be cutting the price of its money transfer services to be more competitive in the industry. Western Union money transfers are used by thousands of people each day to transfer money to others around the world. About 80 percent of Western Union’s money transfer business comes from low-income migrant workers sending money home to their families. North America currently accounts for 19 percent of the company’s total annual revenue.

Not all areas of the country will experience the savings for Western Union money transfers. The company is focusing the cuts on the areas of the country where competition in the money transfer industry is the most fierce. The money transfer business has become increasingly competitive in recent years, as more companies have jumped into the industry. Last year, Walmart launched its own money transfer service, taking market share from Western Union and its biggest rival MoneyGram International Inc. Western Union is currently the largest money transfer company in the world.

Western Union also announced that it would be buying back up to $1.2 billion of shares from shareholders and raised its quarterly dividend from 12.5 cents to 15.5 cents. In the fourth quarter, the company reported that revenue from consumer remittances dropped 2 percent but revenue from its digital business increased 17 percent. In the quarter ended Dec. 31, the company’s net income increased 28 percent to $221.5 million, or 42 cents per share, while expenses fell 4 percent. Total revenue declined 1 percent to $1.41 billion. Analysts predicted a profit of 34 cents per share and revenue of $1.44 billion on average.

Last month, Western Union announced that customers would soon be able to transfer money and pay bills using the Apple Pay mobile wallet. The company is also predicting earnings results for fiscal year 2015 that are higher than analyst estimates. Western Union’s shares were trading at $19 after the bell. Up to Tuesday’s close, the stock had risen about 17 percent in the past 12 months.

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