Globalization snares another U.S. stalwart: Western Union

[Omaha Steve]

http://www.stltoday.com/stltoday/news/columnists.nsf/billmcclellan/story/8CC4CD9B05DF6AA4862574180014EDAB?OpenDocument

By Bill McClellan
ST. LOUIS POST-DISPATCH
03/26/2008

Until the telegraph was invented, news could travel no faster than a man on a horse. So the telegraph was a very big deal, and Western Union became the first communications giant. Then the telephone came along, and because the telephone was to the telegram what the car was to the horse, Western Union took a big hit. At least, that is the way I always imagined things.

So I was a bit surprised to return to St. Louis after a brief vacation and find out that Western Union was shutting down its St. Louis operations and moving nearly 700 good jobs overseas.

Were telegrams still a thriving business? Or maybe Western Union was not the Western Union I remembered. Maybe some other company had taken the name. After all, Wells Fargo is no longer a stagecoach company. It is a financial services company.

I looked up the most recent stories this newspaper has published about Western Union. There were the stories about the company closing its local facilities, which were described as being part of "call center and data operations." Furthermore, the branch of the company was Western Union Financial Services Inc. But that doesn't necessarily tell you much about the core business. It seems like everybody is in the financial services business these days. The auto companies offer their own loans. The airlines offer credit cards. Wal-Mart wants to provide banking services.


Then I found a story from October of last year. "The Western Union Company is teaming up with cell phone service providers to develop a system that would allow consumers to transfer money from country to country via their mobile phones. The Denver-based money transfer company expects to launch its mobile service in the second quarter of 2008."

A money-transfer company. That was the Western Union I remembered. In fact, I've sent and received money on a few occasions. Now that I think about it, those occasions were long ago. I would guess it's no longer quite the service it once was. In the old days, if you were out of cash, you were out of luck. Then somebody invented the ATM. So now if you have a line of credit and can remember your PIN, you no longer need to have a friend wire some cash.

Now you can transfer money with a mobile phone? That's a slice of poetic justice. The phone companies came along and put a hit on the telegraph business, and then the cell phones put a hit on the phone companies, and now the telegraph company teams up with the cell phones to transfer money from country to country.


FULL story at link.

[angrycarpenter]

1. They facilitate the sending of money out of the country

Many immigrants who are sending money home use them. They charge about 20% to do it. They must really make a killing. They have thousands of locations around the world in other peoples businesses.