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Rebecca Loevenguth 2019-11-20

Amazon PayCode: What it is, and what it means

These are exciting times at Western Union. I started my career here 16 years ago, and I’ve never been so convinced about the untapped growth potential we have, especially in light of our new open platform strategy.

At Western Union, we believe that globalization will never stop, that societies will always continue to connect to each other and learn from one another, and that through technology, borders separating people will continue to diminish forever. One clear example of this is the explosive growth of global e-commerce. For a company like Western Union, whose vision is to be the leader in cross-border, cross-currency money movement and payments, this is good news.

Forrester projects that by 2022, cross-border ecommerce sales will be $630 Billion – making up 20 percent of the global ecommerce market. However, fewer than half of cross-border shoppers have international credit cards, and a significant portion of retail transactions are still made in-person. This environment creates opportunities for Western Union to serve unmet customer and partner needs.

In a global survey Western Union conducted last year, 87 percent of the surveyed population said they would “probably” or “definitely” use Western Union as an in-person payment method, if the top e-Commerce retailers made that an available option.

Last October we announced our collaboration with Amazon that allows overseas customers to “buy global and pay local.” And on September 18, Amazon and Western Union announced that the service is also now available to Amazon’s US customers, bringing the total to 20 countries. This is an exciting collaboration as Western Union and Amazon connect the physical and digital worlds in new ways that meet customer needs.

Here’s how the service works: A customer in any of the enabled countries shops on Amazon.com and adds items to their shopping cart. When they check out, they will be presented with the option to pay in person by selecting Amazon PayCode, in local currency at a Western Union Agent location. Previously, only international cards and in some cases bank payments were available options. The amount due is transparently reflected in the customers’ local currency, so they know exactly how much they need to pay.

The customer is given a transaction code and QR code and takes it to a nearby Western Union Agent location to complete payment, and Amazon is notified of the payment in real time, so the order can be processed and shipped. The Western Union interaction is fast and easy, doesn’t require forms, and supports Amazon’s “customer obsessed” philosophy.

While we are still in early days of rolling out the service broadly and optimizing for the customer, the feedback we’ve received from current and prospective partners is quite positive.

Western Union’s trusted brand is an important component of the value proposition. The fact that the in-person interaction in our network is fast and easy makes the service attractive. Our support for local currency payments, with no added fees, is seen as an advantage. The fact that Amazon is notified of the payment in real-time so the item can be shipped quickly matters to the customer. And finally, the ubiquity of our network, reaching over 95 percent of the population within a 5KM radius for the cross-border launch markets, is a key differentiator for us.

This kind of a customer value proposition is only possible by leveraging our entire stack of capabilities: not only our global Agent network, but our global licensing and compliance controls, our foreign exchange and settlement ecosystem, and our local-language call center support.

Through engagements like the one with Amazon, we are leveraging the same capabilities that we’ve spent billions of dollars over the years optimizing for our own customers, for the benefit of the customers of large strategic partners.

While the capabilities are the same, this represents a new business model: new customers with different needs, a different pricing model where the customer doesn’t pay anything extra to leverage the Western Union Payment method, and significant innovation around the in-person customer experience using QR code technology and real-time partner payment notifications. Our vision is to be the platform of choice for partners who want to take their offering global, and we believe we’re uniquely positioned to enable them and to drive long-term Western Union growth through partnerships.

Western Union has set a vision to significantly expand our collaborations and to open our platform in new ways— to not only e-Commerce players like Amazon, but a whole host of players. Recently we’ve had a lot of new demand from firms across multiple industries, such as travel and tourism, financial institutions, governments, the gig economy, and wallets – to connect to our platform and to gain access to our technology early in the process.

We’ve matured this strategy in the past 18 months and, based on our experience with other third parties, we have also introduced Western Union’s Developer Portal. This public fintech portal will allow partners to have access to our technology assets and interact with our APIs. Western Union has been evolving its partner-facing technology, but this Developer Portal signals Western Union’s continuing commitment to growing our partnership ecosystem and continuing to advance the cutting edge of the FinTech world.

At the beginning, I said that these are exciting times at Western Union, and that’s also where I’ll end. But our story with Amazon represents more than just one strategic alliance. It points to a future of endless possibilities for everyone: where companies join together to move money globally; where cash and digital money can finally be used together to create real, meaningful solutions to meet real customer needs.

We are excited to be helping build that future.

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