Western Union: История финансовой и телеграфной компании

American financial services and communications company
the financial services company

The Western Union Company is an American multinational financial services corporation headquartered in Denver, Colorado. Founded in 1851 as the New York and Mississippi Valley Printing Telegraph Company in Rochester, New York, the company changed its name to the Western Union Telegraph Company in 1856 after merging with several other telegraph companies. It dominated the American telegraphy industry from the 1860s to the 1980s, pioneering technology such as telex and developing a range of telegraph related services, including wire money transfer, in addition to its core business of transmitting and delivering telegram messages. After experiencing financial difficulties, it began to move its business away from communications in the 1980s and increasingly focused on its money transfer services. It ceased its communications operations completely in 2006, at which time The New York Times described it as "the world's largest money transfer business" and added that the company would remain as such due to the large number of immigrants wiring money home. From the perspective of the history of technology, Western Union notably completed the first transcontinental telegraph in 1861, being a part of U. S. industry's investments into developing American communications between the coasts of the Atlantic Ocean and the Pacific Ocean. The first messages went to then President of the U. S. Abraham Lincoln. In 1856 the company merged with its competitor the Erie and Michigan Telegraph Company, controlled by John James Speed, Francis Ormand Jonathan Smith and Ezra Cornell and, at Cornell's insistence, changed its name to Western Union Telegraph Company. In 1857, Western Union participated in the 'Treaty of Six Nations', an attempt by six of the largest telegraph firms to create a system of regional telegraphy monopolies with a shared network of main lines. After the creation of the 'Six Nations' system, Western Union continued to acquire both larger & smaller telegraph companies and by 1864 had transformed from a regional monopoly into a national oligopolist with its only serious competitors being the American Telegraph Company and the United States Telegraph Company. Western Union completed the first transcontinental telegraph in 1861. Notably, the first messages went to then President of the U. S. Abraham Lincoln. The firm additionally formed the Russian–American Telegraph Company in an attempt to link America to Europe, via Alaska, into Siberia, to Moscow – a project abandoned in 1867 following the successful laying of a transatlantic cable in 1866.

In 1866, Western Union acquired the American Telegraph Company and the United States Telegraph Company, its two main competitors, for a time gaining a virtual monopoly over the American telegraphy industry. a standardized time service in 1870 and wire money transfer in 1871. In the 1870s, the company faced increased competition from newly formed rival telegraphy conglomerate Atlantic and Pacific Telegraph Company and from the nascent telephony industry led by the Bell Telephone Company. Western Union instead attempted to launch a rival telephony system before settling a patent lawsuit with Bell and leaving the telephone business completely in 1879. Financier Jay Gould orchestrated a merger of the Atlantic and Pacific Telegraph Company with Western Union in 1881, giving him a controlling share of the merged company.

When the Dow Jones Railroad Average stock market index for the New York Stock Exchange (NYSE) was created in 1884, Western Union was one of the original eleven companies to be included. By 1900, Western Union operated a million miles of telegraph lines and two international undersea cables. AT&T gained control of Western Union in 1909, acquiring a 30% stake in the company. Western Union acquired its only major competitor in the American telegraphy sector Postal Telegraph, Inc. in 1945, effectively giving the company monopoly power over the industry. Teleprinter equipment for the telex network was originally provided by Siemens & Halske AG and later by Teletype Corporation. Direct international telex services commenced in the summer of 1960, with limited service to London and Paris. In honor of Valentine's Day 1959, Western Union introduced the Candygram, a box of chocolates accompanying a telegram that was featured in a commercial with the famously rotund radio announcer Don Wilson.

In 1963, Western Union organized its international cable system properties and its right of way for connecting international telegraph lines into a separate company called Western Union International (WUI), which it sold that year to American Securities. In 1967, American Securities listed WUI as a publicly traded company on the New York Stock Exchange. WUI was acquired by Xerox for $207 million in stock in 1979 and subsequently sold for $185 million in cash to MCI Communications in 1981. MCI renamed WUI to MCI International, ceasing the use of Western Union branding. Western Union became the first American telecommunications corporation to maintain its own fleet of geosynchronous communications satellites, starting in 1974. The fleet of satellites, called Westar, carried communications within the Western Union company for telegram and mailgram message data to Western Union bureaus nationwide. It also handled traffic for its telex and TWX services. The Westar satellites' transponders were also leased by other companies for relaying video, voice, data, and facsimile (fax) transmissions. In 1981, Western Union purchased a 50% interest in Airfone. It sold Airfone to GTE in 1986 for $39 million in cash. From 1982, as a result of financial services deregulation, Western Union began offering wire money transfer services globally. The restructuring was completed in 1987 when investor Bennett S. LeBow acquired control of Western Union through an outside of chapter 11 process that was a complex leveraged recapitalization. The official name of the corporation was changed to New Valley Corporation in 1991, as part of the company's move to seek bankruptcy protection to eliminate the firm's overleveraged balance sheet while continuing to grow the money transfer business. The name change was used to shield the Western Union name from being dragged through the proceedings (and the resulting bad PR). Under the day to day leadership of Amman and the backing of LeBow, the company's value increased dramatically through its years operating under chapter 11. As part of the bankruptcy proceedings, Western Union's telegraphy business was sold to iTelegram. Following various restructurings, including negotiations with Carl Icahn who became a large bond holder, New Valley Corporation was sold in a bankruptcy auction to First Financial Management Corporation in 1994 for $1.2 billion. In 1995, First Financial merged with First Data Corporation in a $6 billion transaction. After acquiring the company, First Data Corporation made the decision to relaunch telegraphy services under the Western Union brand.

On January 26, 2006, First Data announced its intention to spin off Western Union into independent publicly traded financial services company focused on money transfers through a tax free spin off to First Data shareholders. The spin off occurred as planned on September 29, 2006. The next day Western Union announced that it would cease offering telegram transmission and delivery. In May 2009, Western Union announced its plan to acquire Canada based Custom House from Peter Gustavson. The deal closed in September 2009 for a purchase price of US$371 million. This acquisition led the company to be re branded as Western Union Business Solutions. In January 2011, Western Union acquired Angelo Costa, a group active in money transfer and services to immigrants. Angelo Costa has a network of 7,500 points of sale throughout Europe. The agreement was signed for US$200 million. In July 2011, Western Union acquired Travelex's Global Business Payments division for £606 million. In October 2011, Western Union completed the acquisition of Finint S. r. l., one of Western Union's leading money transfer network agents in Europe, with more than 10,000 subagent locations across Italy, Spain, and the United Kingdom. In May 2015, rumors emerged over a proposed merger of Western Union and competitor MoneyGram, at a time when both companies’ revenue were declining. Western Union denied this was the case. In January 2017, Ant Financial, Alibaba’s financial technology firm instead unsuccessfully attempted to acquire MoneyGram for $880 million, but this was blocked by the U. S. government citing national security concerns. In 2018, the company moved its headquarters from Englewood, Colorado to the Denver Tech Center. The Englewood office complex was sold in 2020 for $40 million. In November 2020, Western Union acquired a 15% stake in the digital payments unit of Saudi Telecom Company for $200 million. In 2022, Western Union suspended operations in Russia and Belarus due to the Russian invasion of Ukraine.

Money can be sent online or in person at Western Union agent locations. Cash can be collected in person at any other Western Union agent location worldwide by providing the 10 digit MTCN (Money Transfer Control Number) and identification. In some cases, a secret question and answer can be used instead of identification.

In October 2007, Western Union announced plans to introduce a mobile money transfer service with the GSM Association, a global trade association representing more than 700 mobile operators in 218 countries and covering 2.5 billion mobile subscribers. The proliferation of mobile phones in developed and developing economies provides a widely accessible consumer device capable of delivering mobile financial services ranging from text notifications associated with Western Union cash delivery services to phone based remittance options. Western Union's mobile money transfer service offering will connect its core money transfer platform to m bank or m wallet platforms provided by mobile operators and/or locally regulated financial institutions.

The company launched the Western Union Connect service in October 2015, following partnership agreements with major instant messaging apps WeChat and Viber. The partnership allows users of WeChat to send up to $100 to China, the US and 200 other countries,

As the Internet became an arena for commerce at the turn of the millennium, Western Union started its online services. BidPay was renamed "Western Union Auction Payments" in 2004 before being renamed back to BidPay. BidPay ceased operations on December 31, 2005, and was purchased for US$1.8 million in March 2006 by CyberSource Corp. who announced their intention to re launch BidPay. BidPay was later discontinued by CyberSource effective December 31, 2007.

Western Union was a major shirt sponsor of the Sydney Roosters NRL team from 2002 to 2003. The company still sponsors the team, but not as a shirt sponsor. Globally Western Union sponsors numerous community events that help support the diaspora communities that use the global Money Transfer service. They also sponsored numerous WWE and WCW pay per view events such as the No Way Out 1998 and Slamboree 2000. They sponsored UEFA Europa League from 2012 until 2015. The First Data Western Union Foundation donates money to charitable causes globally. After the 2004 Indian Ocean tsunami, the Foundation donated US$1,000,000 to the relief effort. The Denver Nuggets of the National Basketball Association announced a three year deal making Western Union the team's jersey sponsor, beginning with the 2017–18 NBA Season. Liverpool F. C. announced on August 9 2017, that Western Union would become their first ever sleeve sponsors, from the start of the 2017–18 season. They signed a £25m deal for 5 years as Liverpool's sleeve sponsor.

Western Union telegrams were transmitted through a store and forward message switching system. Early versions were manual telegraph systems. Later systems using teleprinters were semi automatic, using punched paper tape to receive, store, and retransmit messages. Plan 55 A, Western Union's last paper tape based switching system (1948–1976), was fully automatic, with automatic routing. Western Union was a prime contractor in the Automatic Digital Network (AUTODIN) program. AUTODIN, a military application for communication, was first developed in the 1960s, but was dismantled in favor of the ARPANET, the precursor to the modern Internet in the 1990s. The Defense Message System (DMS) replaced AUTODIN in 2000. AUTODIN, originally named "ComLogNet", was a reliable service that operated at 99.99% availability, using mechanical punched card readers and tab machines to send and receive data over leased lines. During the peak operation of AUTODIN, the US portion of the network handled 20 million messages a month. Western Union failed in its attempts to engineer a replacement (AUTODIN II), leading to the development of an acceptable packet switched network by BBN (the developer of the ARPANET) which became the foundation of today's Internet. AUTODIN service ceased in 2000, years after it had become obsolete. A related innovation that came from AUTODIN was Western Union's computer based EasyLink service. This system allowed one of the first marketable email systems for non government users. The system allowed the same message to be sent simultaneously to multiple recipients via email, fax, mailgram, or telex services as well as allowing messages to be sent from the integrated formats. With the service, users could also perform research utilizing its InfoLink application. EasyLink was spun off as a separate company and is now part of OpenText.

Western Union advises its customers not to send money to someone that they have never met in person. Despite its efforts in increasing customers' awareness of the issue, Western Union is used extensively for internet fraud by scammers. Western Union has been required to maintain records of payout locations of the individuals who may be laundering the money, though this information may be obtained only through the use of a subpoena. Hence advance fee fraud and romance scammers continue to receive funds via Western Union confident in the knowledge that money lost to overseas scammers is almost always unrecoverable. For this reason, it is banned as a medium of payment through eBay, and discouraged on other online auction websites. Western Union admitted to allowing wire fraud in January 2017 and agreed to pay $586m, for turning a blind eye as criminals used its service for advance fee fraud. Scammers engaging in various 419 advance fee scams including offering fake job offers and lottery prizes, were able to process transactions using Western Union money transfer, mainly by giving the agents a share of the earnings from their scams. Western Union failed to investigate hundreds of thousands of complaints that were filed by victims.

The Central Bank of Ireland reprimanded and fined Western Union €1.75m in May 2015 because of failures in anti money laundering practices which could have left the firm's payment services open to being used for money laundering and/or terrorist financing saying that they were concerned that Western Union "failed to have in place sufficiently robust systems and procedures to train agents, to monitor and identify suspicious activity in respect of smaller transactions, and to maintain appropriate records" and "the splitting of payments into many separate smaller payments is a common method used to launder money. Similarly, terrorist financing is often carried out by small payment transfers." Western Union agents also allowed Chinese immigrants to the US to use the service to send hundreds of millions of dollars, by sending the amounts in smaller increments to avoid transfer reporting requirements, to pay human smugglers. Among other charges, the Justice Department showed that Western Union was complicit in creating an ecosystem where criminals were able to engage in consumer fraud and human trafficking. The charges were dismissed in March 2020. In 2018, Western Union was fined $60 million by the New York State Department of Financial Services. The press release accompanying the fine stated that, "Western Union executives put profits ahead of the company’s responsibilities to detect and prevent money laundering and fraud, by choosing to maintain relationships with and failing to discipline obviously suspect, but highly profitable, agents." On May 29, 2019, Western Union announced the departure of a company executive, Odilon Almeida, who served as executive vice president and president of Global Money Transfer. In 2012, Stewart Stockdale, who had the same position as Almeida, left the company in a similar situation.

The book The One Percent Doctrine: Deep Inside America's Pursuit of Its Enemies Since 9/11 alleged that Western Union provided United States military intelligence with personal information.

Western Union has been accused of engaging in anti competitive behavior in Africa as a result of a lack of competition on the continent. However, the fees can be as high as 10% or more, depending on the region. Africa's remittance market remains the most expensive in the world, and the region is estimated to incur excess costs of $1.4 billion to $2.3 billion per year as a result of these high remittance fees. by requiring the consumer to conduct transactions via nominated banks. The commission concluded that the allegations were insufficient and found in favor of Western Union.