The Western Union Company (NYSE:WU)
2012 Investors Day
May 09, 2012 8:30 am ET
Michael A. Salop - Senior Vice President of Investor Relations
Hikmet Ersek - Chief Executive Officer, President and Director
Scott T. Scheirman - Chief Financial Officer & Global Operations and Executive Vice President
Stewart A. Stockdale - Executive Vice President and President of Global Consumer Financial Services
Jan Hillered - Senior Vice President of Europe & Commonwealth - Independent States
Jean Claude Farah - Senior Vice President of Middle East & Africa
Drina C. Yue - Senior Vice President of Asia Pacific
Victoria Lopez-Negrete - Senior Vice President and General Manager of North America
Odilon Almeida - Senior Regional Vice President and Managing Director of Latin America & Caribbean
Rajesh K. Agrawal - Executive Vice President and President of Western Union Business Solutions
Diane Scott - Chief Marketing Officer, Executive Vice President and President of Western Union Ventures
Khalid Fellahi - Senior Vice President of Electronic Channels
David Togut - Evercore Partners Inc., Research Division
Kartik Mehta - Northcoast Research
Bryan Keane - Deutsche Bank AG, Research Division
Darrin D. Peller - Barclays Capital, Research Division
Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division
Ashwin Shirvaikar - Citigroup Inc, Research Division
Sara Gubins - BofA Merrill Lynch, Research Division
Andrew W. Jeffrey - SunTrust Robinson Humphrey, Inc., Research Division
James E. Friedman - Susquehanna Financial Group, LLLP, Research Division
Ladies and gentlemen, please welcome Senior Vice President, Investor Relations, Mike Salop.
Michael A. Salop
Thank you. Good morning, everyone, and thank you for joining us today. I'm going to quickly go over the agenda for the day, what we have planned for you. All the slides are in your notebook, for those of you here in the Times Center. You also have the agenda in the notebook. The slides will also be available on our website after the presentations today.
Hikmet is going to start things off in a couple of minutes. He's going to go over our strategies and overview of the company and where we're going longer term. Scott Scheirman is going to speak about how we take those strategies and think about translating them into the shareholder return. Then we're going to spend most of the morning talking about our 3 strategic growth areas in a little bit more depth. Stewart Stockdale, who's Head of Global Consumer Financial Services, and his team are going to go through what's happening around the world. You'll hear from each of the regional leaders, and they work for Stewart.
Then we're going to take a short break around 10:40. For those of you here in auditorium, we have some exhibits set up outside in the hall on both sides. You'll have about 20 minutes to check out the exhibits, then we'll come back and move to Business Solutions. Raj Agrawal, who's President of Business Solutions based out of London, will speak about their strategies. And our regional leader from Asia Pacific will also speak on her business-to-business area. Then we'll move to Ventures, which is our new services and products. Diane Scott runs that group. She's going to speak about the strategies. And then our leaders for our Digital and Stored Value businesses will also speak. Diane is also our Chief Marketing Officer. We'll then come back and speak a little bit of our brand -- about our brand, and then we're going to have question-and-answer period for about a half-hour before lunch. We have lunch downstairs. We have a guest speaker, who is the business editor of The Economist. He's also an expert on migration. A very interesting speaker, so we hope you're able to join us for lunch.
So we hope that it's worthwhile for you to come here and spend the day with us. We thank you, all, for coming. And I want to show you a short video, and then we'll turn it over to Hikmet.
Ladies and gentlemen, please welcome President and CEO, Hikmet Ersek.
Good morning, everyone. Good morning to our 2012 Investors Day. I am very excited to be here today. As you recall -- some of you recall, 18 months ago, we shared with you -- at our Investors Day, we shared with you how we want to take this company to the next level.
We had good reports coming out of this meeting, and even some of you wrote it's not your grandfather's Western Union anymore. And yes, indeed, change is happening at Western Union, and we made good progress. And I believe we are executing and delivering against our strategies.
As Mike mentioned, we have a lot to share with you today. You will be hearing from my executive team, mainly from our business leaders but also from some special guests. We hope to help you better understand our business and what we are doing to accelerate growth in the near term, but we also want to share with you our vision to add new areas of growth for long-term opportunities to drive the shareholder value.
You will hear how we are focused on our core retail Money Transfer business, how we are growing our core Money Transfer with additional channels, how we are partnered with global brands to launch new products for our underserved customer, how we are entering and growing to a new business segment with our cross-border transfers for SME segment. And with this, you will also hear how our brand is evolving and how are we moving money for better for the underserved customers.
Now first let me talk about our vision, why we can execute and how we're going to execute against our vision. Our vision is to be the premier financial service provider for the underserved. So what do we mean with the underserved consumer, underserved customer? On the one side, we have the consumers. Today, our core Money Transfer business offer products for 200 million migrants and their families back home, but also people who travel, have emergency payments or students who study abroad use our services. But we define our consumer potential much bigger than what we serve today. There are potential $2 billion of those consumers that are underserved by many financial institutions today. There are not many global companies which have our assets and identify this customer segment as a huge growing market. These customers are maybe not underbanked. They are banked, but they do not get the service they would like to have. We believe we as Western Union can and will offer products and services to these underserved consumers.
On the other side, we have the business side. There are about 140 million small businesses, including 28 million that engage cross-border trades. These are also financially underserved customers. We believe, with our approach, we also see here a huge growth opportunity. So while we execute against our vision, we will better serve our existing customer, but there are also tremendous opportunities to leverage our existing strengths to enter into new underserved customer segments.
So today, believe me, we are very focused on executing. We focus very much on our existing very strong foundation, which today supports and protects a healthy core business. We focus on our global brands, our network, our relationship with our customers. These are undermet fundamentals, which drives our very profitable core $5 billion-plus revenue business. But not only on the core Money Transfer business, we are also adding new customers, adding new additional services, channels and products to our portfolio. Good news is we are all focused on growth. When we accelerate our growth, our business model will allow us to drive even margin expansion.
Just a reminder, you will hear about this later from Scott Scheirman, but our fixed costs are 35% and our variable costs are 65%. So with the growth, the margin expansion should come. So, as I mentioned, the strategies are in place and we are very much focused on the execution.
Before I discuss about the strategies, let me give you -- let me take a few minutes to remind you about our strengths of the company. These strengths separates us from the competitors. I believe we have huge competitive advantage, our global network, our strong brand, our global organization and resources and our regulatory and anti-money laundering capabilities. There are not many companies worldwide which could show these capabilities to you.
Let me start with our global network. As everybody in this room know, but most importantly, as our customers know, our global agent network is unmatched. In 160 years of Western Union history, we have been always innovative and set milestones. Another milestone we set was 2 weeks ago. We opened our 500,000th agent location here in New York. We are present in 200 countries and territories around the world. We serve 16,000 corridors and country peers. Our agent range -- our agents range from the large banks and post banks to small mom-and-pop retailers worldwide. We have location access and convenience that is not only unmatched by other money transfer businesses, but also not many companies from other industries can match this. This is also the main reason why so many banks, big banks or retail organizations are joining our network. We give them immediate access to 200 countries, give them access to 500,000 locations, give them access to the underserved customers where others can't do this. I believe that's one of our huge competitive advantage.
Our second competitive advantage is our global brand. We have a very strong brand awareness around the globe, particularly with the underserved consumers in developing countries, but also with the underserved migrant customers in so-called developed countries. Our brand awareness globally is 80%. Some examples: in the U.S., we have 80-plus percent; in some countries like Australia, we have 91% brand awareness; in France, 91%. Also in the receiving countries: in Morocco, 97% brand awareness; in Philippines, 90%; in India, 91%.
The brand awareness drives also our unique relationship with our customers. In 2011, we had approximately 17 million -- 70 million money transfer centers. And of course on the other side, many, many receivers, millions of receivers and millions of bill payers. Also approximately 19 million of our consumers hold Western Union loyalty cards, where we communicate to them not only to have more loyalty on our core business but also to serve them with new products and services. When a migrant leaves his home for a new country, our brand is already familiar to the potential customers. It stands for trust, reliability and convenience. For example, in the Philippines, they give the customers before they leave the country to Middle East or to the U.S. Western Union packages to make them aware about the new host country but also of the Western Union Money Transfer capabilities.
Another strength for Western Union is, of course, our global organization and resources. We have the financial strength. If you compare our industry, probably we have the most financial strength. We have a strong balance sheet and strong cash flow. We have A- credit rating. This financial strength is very much preferred for by many global partners, by agents. Our agents know that they have chosen a strong -- financially strong partner. We can also leverage our infrastructure to offer new services. We have a global presence with our offices and employees around the world. Our employees are diverse, coming from 75 different countries who really understand on the front the customer needs. At our 500,000 locations, we have also millions of Western Union front line associates as our ambassadors who serve today our customers with Money Transfer business but also potentially in the future with new products.
Our fourth competitive advantage is our global anti-money laundering regulatory capabilities. The regulations around our business are really highly complex, and we have regulatory complexity in all our markets. We have to comply with various acts and interdictions list around world, as well as maintain a very active risk management system to detect and deter potential money laundering activities. It sounds complex, and indeed, it is complex. But we see that as a competitive advantage as we comply with various acts and interdiction lists around the world in 200 countries. And the regulatory environment is changing constantly in different parts of the world. Let me give you an example, a recent example. Here in the U.S. actually, with money transfer providers now have to adapt to conform with the rules of Dodd-Frank Act. Implementation and operation of the new disclosure requirements under Dodd-Frank is really complex. And although there are going to be some costs for -- to implement that, we view as a competitive advantage. We have the technology and resources available to meet the installation needs across our agents that are based in the U.S., while others may don't have the resources and the technology. To protect our customers, our brand, to comply with rules and regulations, globally we dedicate about 600 employees around the globe to these efforts, and we spend yearly about $60 million on anti-money laundering and regulatory environment.
So ladies and gentlemen, I talked about our vision to be the premier financial service provider for the underserved. I talked about Western Union's strong competitive advantages to build it. Now I would like to talk about -- really about strategic -- specific strategies. We have 3 main growth areas. The first one is Global Consumer Financial Services with our consumer-to-consumer money transfer and with our consumer bill payments. We have Business Solutions with international business-to-business payments, and Ventures, which is our new service area and today includes Digital and Stored Value. You will be hearing more of these from each business leaders today. But let me spend a few minutes on our -- each of these areas.
Let me start with the Global Consumer Financial Services. It's the biggest part of our business, and it represents the cross-border money transfer for consumer, represents the main part of our revenue. As you know, the remittance market is growing. It's a growing market. The need for migration despite some current political challenges is a fact. We believe the demographics in many countries and the economic development will support worldwide migration and the growth of the remittances. After a brief dip in financial crisis in 2009, the remittance market is gradually returning to growth, and we believe the long-term outlook for the market is better than the current environment. As the global economies return to stronger growth and employment over time, the remittance market should accelerate.
At Western Union, we are very focused on growing our market share over the long term regardless on the economic environment, and we have 2 main drivers for that. The first one is adding further network, adding locations, adding -- expanding our network. And the second one is increasing retention through better customer experience at point-of-sale. Let me start with the first one, expanding our network. Many people and many of you ask me, "Why do you want to double your network, whether this makes financial sense for you and for our agents?" My response is these are huge opportunity for our business and our agents. Few examples: in the U.S., we have one location every 6,000 people, which compares in China, one location for every 39,000 people. In Germany -- although in Germany, we have a huge network with the German Post Office, with the savings banks, with ReiseBank, with dedicated Western Union bank locations, still 16% of the available market is white space, which could benefit for the location expansion.
To expand to new customer segments, there are also lots of trade opportunities, such as retail expansion with the PSE license in European Union or the banking environment in the U.S. Additional points of presence such as ATMs and kiosks are active, and we are getting more of these, like in Italy, we have today or in Japan. Network expansion helps agents to grow their business to get more revenue opportunity.
So maybe the next slide gives you a better understanding why network expansion is so important. We have increased our agent locations from 120,000 locations to 500,000 locations in 10 years. At the same time, we increased our market share from 7% to 17% last year. Expanding our network adds growth and profits. We are committed aggressively ramping up our location and points of presence growth in the coming years. You will hear much more about this from our business leaders, from Stewart Stockdale and regional leaders.
But let me go to the next business strategy unit, which is the B2B Business Solutions, B2B Money Transfer. Our business solution area is new, still relatively small compared with our consumer money transfer but has a huge potential to grow. As you know, I'm a big believer on the opportunity for Western Union to serve all small business customers in their cross-border payment needs. This opportunity remains to me -- reminds me like the consumer money transfer business many years ago.
It's a different business with the FX revenue opportunity, but the potential of this business similar like the consumer money transfer, cross-border money transfer business. It's a huge market. We estimate the foreign exchange revenue opportunity for small business cross-border at $24 billion. And these customers are also underserved customers like our consumers.
In today's world, it's easy to pick up the phone, send goods as SME to another country. But it's not easy especially for small businesses to make cross-border payments. But I believe Western Union provides a service with a competitive pricing to these potential customers. By becoming Western Union's core Money Transfer -- or by combining Western Union's core Money Transfer business and strengths with the capabilities with the acquired Travelex business, we believe we have a great offer for the small business entities globally. Our brand, global reach, our balance sheet, regulatory assets will help Western Union Business Solutions to grow. As we acquired Travelex a few months ago, we were only in the 13 countries. Today, we are already in 25 countries sending money to 135 different currencies. But especially this year, we are very focused on the integration of Travelex with Western Union Business Solutions to accelerate growth. The opportunity, as I mentioned, is big. We expect this year that our Western Union Business Solutions be about $400 million revenue, but the growth this year because we have only 2% market share. We want to extend market share by deeper penetration in existing markets, expanding to new geographies and adding new services and channels. Raj Agrawal, who leads the Business Solutions, will discuss more about this in few minutes.
So let me go to the last but not least growth area, which are the Ventures. Ventures is a new business area that will allow us to leverage our strengths, which I mentioned before. We would like to offer and started actually already additional financial services to existing consumers but, as well, for the new consumers. These are a fast-growing, early-stage businesses that could potentially become as large part as our existing businesses in the future. We manage our Ventures business in 3 main areas. First one is the Digital Ventures, which includes westernunion.com online money transfer and mobile money transfer. The second one is Stored-Value Ventures, which includes the prepaid card business and represents the store and spend capabilities. And the last one is the Data Ventures. It is our vision and dedication to develop the largest, the largest customer database for the underserved with additional services either to our own or to partners.
Ladies and gentlemen, as we develop new services in Ventures, one of the areas we are exploring deeply is working with partners. Our partners, global partners, do value Western Union's brand, network, relationship with underserved consumers around the world. Let me give you a few examples. We recently signed an agreement with Ericsson to integrate Western Union mobile money transfer services with Ericsson's platform. With this globally, the mobile network operators who use Ericsson solutions can add Western Union Money Transfer to their offerings. We also just announced -- actually 3 days ago -- that we want to work with Allianz, one of the leading financial service provider and insurance provider globally. We want to leverage our brand and network to provide insurance to the underserved in key markets. They also want to offer Western Union money transfer service at their locations in many countries. With this, we also announced creating a new division of Western Union Insurance at the Venture's part. But one of the most promising and exciting partnership we have is our partnership with MasterCard. And as you recall, last year, we entered into a strategic agreement with MasterCard for prepaid card loads and additional money transfer capabilities.
Now ladies and gentlemen, right now, I would like to introduce a special guest to help -- to give you a better understanding of why MasterCard sees benefits with partnering with Western Union. Ajay Banga, as many of you know, is the President and Chief Executive Officer of MasterCard worldwide. Ajay has a huge experience in the global payments area but besides that, he's also one of the most successful CEOs within the Fortune 500 companies. I have asked Ajay a few days ago if he could speak to us for a few minutes on why he wanted to partner with Western Union, and he was kindly to volunteer.
Without further ado, I would like to now turn the stage to Ajay Banga.
Ajaypal S. Banga
So it's a pleasure to be here, Hikmet, and thank you for having me. And he is not just a business partner. We've also -- over the course of the last couple of years of getting to know each other and negotiating our partnership, we've become good friends. And the first sign of good friendship is that he's presented me with his first prepaid card that is issued with our logo in the U.S. And the good news is it's loaded with his monthly salary, which I think is a great sign of partnership. I love this. And this is my agenda for this morning. I think he's making sure I say all the right things right now. The other fine thing he did really well, if you noticed outside, he repainted the entire auditorium to look like a MasterCard space. It's all orange and red, which I also thank him very much for.
But all the jokes aside. Look, we are very excited. We did this deal in November. And the work actually started on it probably a couple of years before that, actually with the help of Stewart Stockdale, who you're going to listen to in a little while with a team at MasterCard. But it really picked up steam and momentum with Hikmet's desire to make this more than just a transaction in one country where we issue cards together. So what we are doing and why we're interested in this, you saw it in his concentric circles in the beginning. MasterCard has traditionally been a company that has catered to the banking audience of the issuer and has had an opportunity with him now to get into the traditionally underbanked or unbanked segments in a way that I get a partner who has distribution with 0.5 million locations, has a trusted brand in those audiences. They believe -- the ones he's serving, they believe in the value of trust and respectability that Western Union brings to the party. And so those 2 combinations are a very strong combination and attraction for a company like ours.
What we are trying to do is to combine 3 ways of doing business together. The first one is the prepaid card, the reloadable card. And that's what I was just showing to you. And work on that is going on as we speak in a number of markets around the world, including in the U.S. The second one is a reload program. And the idea there is that when prepaid cards are issued with the MasterCard logo with so many other partners who MasterCard has, then their ability to reload those cards is key to the longevity of the relationship with that consumer. And as you know, the customer acquiring a customer is of a value that if you don't have reloadability on that card frequently, you don't make back the money you'd like to make with that consumer.
And so what Hikmet's distribution does for MasterCard, and not just for MasterCard, but all of the other partners that we have signed a prepaid card deal with, is that it gives them access to reload their cards in 500,000 locations around the world. And while there's only one for every 39,000 people in China, that's about 10,000 locations more than I would ever have in China. And so he looks to that as an opportunity to grow further. I look on the ones he already has as an opportunity for me to be able to get my consumers access to reload.
The third aspect is the P2P money movement system. And if you think about it carefully, for me to organize money movement in any form, not just cross-border but even domestic, the biggest problem for MasterCard in most of its traditional clients has been the last mile and the first mile issue. Well in this case, thanks to the agent distribution network and with all we could do with the Web together with them, think of how we can solve for the last mile and the first mile. And that's where our monies and technology combined with Western Union's capabilities can generate for us over the next few years. So I kind of see this as a 5- to 10-year effort, where we can start with prepaid, which is more immediate; reload, which will take some time because of the technology till we get done; and then P2P, which to me is actually the most exciting out of the whole lot. So that's kind of the 3 things I'm interested in and the focus of what we are doing.
There are 2 other things we are working on. One of those has to do with Hikmet's interest in the business area. And I believe that MasterCard, which has all the pipes connected to connect millions of merchants with tens of thousands of banks with billions of consumers, we can settle transactions in many currencies. We could settle digits of any type.
And when I can combine somebody who's interested in operating between SME and small venturers and micro business movement of money, to me, that's an interesting opportunity as well. I don't yet know how we will do it with him, but we are working on it. And the last part we're working on is with all the things we are doing with mobile and e-commerce and wallet, and what we could do with Hikmet's team as he gets his own ambitions and strategy clear in that space, what we could build out together. That's kind of what we are up to. There's work right now going on in the 2 most interesting markets, Latin America -- in fact, in Mexico, there's a cross-functional group looking at prepaid, reload and P2P. And then across the Middle East and Africa, again prepaid, reloadable, P2P. So those are the kind of places we are making business happen together.
So Hikmet, thank you for having me, sir. And good luck with the rest of you Investor Day. Thank you.
Thank you, Ajay, and good luck with your shopping with the card with my salary. I hope the credit department doesn't decline it. Yes. There are also other opportunities besides Ajay mentioned with partnering with many partners. We do leverage our assets. We plan to create a robust database. We also create -- as we have these underserved customers, we plan to create a robust database, the largest database worldwide for the underserved to provide additional money besides our existing money transfer services, also additional services.
We have a vision to become the world's largest stored value load and access network. We will use our existing 500,000 locations as agent -- as Ajay told us before but also adding new touch points to load prepaid cards and stored value accounts. Besides this, we would like to grow also our existing Money Transfer business with new channels. As you know, we already have a great start in our Digital business. In 2011, we had about $100 million revenue -- in digital revenue through westernunion.com. And with some investments that we are doing today, and you're going to hear about that improvements, we believe that our $100-million business will be about $500 million business in 2015.
So many investors always ask me, "Why you, Hikmet? Why you, as Western Union, think that you can grow this business? And why you're going to be successful rather than any technology company?" Let me spend a few minutes in explaining this one. First, as you recall, it's important to remember Western Union is today market leader in money transfer business. We have built an incredible network over the years, now with 500,000 retail locations in 200 countries and territories. Our brand is well known and trusted around the globe. We have the regulatory and anti-money laundering capabilities to operate in all countries. We can convert and settle in more than 100 currencies.
Our retail network serves as the hub in the center. It's a global network with the one-stop shopping. We connect third-party agents to our network. We connect grocery stores to banks, check cashiers to post offices, banks to mom-and-pop shops. We connect 16,000 corridors. We connect billions of customers wherever they are. Our agents range from some of the largest banks in the world to the smallest neighborhood shops in the rural areas. But the common trend is always we connect all of them with one-stop shopping. Western Union is trusted brand for millions of customers, a trusted brand for agents and support -- has the operational system for the Money Transfer business.
Now when you think about bringing digital and other service to our customers, the hub model doesn't change. Only instead of just connecting physical locations, we can connect also combination of online, mobile, card, stored value, account-based ATMs, and which is happening today. Connecting digital to a physical location is very important, and we see that at Western Union today, which is primarily online money transfer to our retail location. On one side, you send money online from here. For instance, you can send money from your PC, from your iPad, from your mobile. On the other side, the receiver picks up in minutes money wherever he is or she is in the world with 200 countries at 500,000 locations. No one can match this.
We offer customers and also partners, agents the opportunity to connect to a global network and gain access to all different partners, whether they be physical locations, accounts or mobile wallets. So we believe our model being the hub of connecting our global network, cross-border money transfer with one brand, it does work. The partners like it. And we believe only Western Union has these assets and are excited about adding more choices for the existing consumers.
Let me finish by saying we are very excited about our opportunities. Our product -- our portfolio consists of strong foundation in Global Consumer Financial Services where we have the opportunity to accelerate growth. Our new unit, Business Solution, provides a huge expansion opportunity to leverage our assets with our new acquisition of Travelex to better serve and grow underserved businesses in the cross-border payment needs. And lastly, our Ventures part. It gives our product and channel pipeline for high growth in the early stage businesses.
We believe the opportunity to accelerate growth over the next few years are strong. Despite the economic challenges in some parts of the world which exists today, we believe we have the right growth model. We believe in our core Money Transfer business and are taking steps to drive a higher growth rate than we have seen recently. We can complement with this -- with higher growth with Business Solutions and very high growth from our smaller early-stage businesses such as Digital and Stored Value.
Over time, additional new ventures, businesses will contribute and will continue to develop new services for the 2 billion underserved consumers around the world, both for us and for our strategic partners. So we are very excited about the future. Again, thank you. Thank you for joining us today. You will be hearing more about each of the growth areas through the morning, and we hope you will walk away with a much better understanding of our plans about our future, about the Global Consumer Financial Services, about Business Solutions and Ventures businesses.
Ladies and gentlemen, today, we are the global largest retail money transfer company, and we're going to grow that. But also, we want to be the global largest cross-border money transfer company for SMEs. We want to be the global largest reload and cash access network for prepaid and stored value. We want to be the global largest digital agent with westernunion.com. We want to be the global largest database for the underserved to served with more product. We are very much looking forward to become the premier financial service provider for the underserved.
Now, I would like to show you a brief video capturing the opportunities we have been discussing this morning. Thank you very much.
Ladies and gentlemen, please welcome Executive Vice President, CFO and Global Operations, Scott Scheirman.
Scott T. Scheirman
So thank you, and good morning. I too want to thank you for joining us for our 2012 Investor Day. And what I have the opportunity for about the next 20 minutes is to share with you of how we translate the business strategies that Hikmet outlined earlier but how we translate those business strategies into generating strong total shareholder returns over the years to come. And as Hikmet mentioned, we're keenly focused on 3 key growth areas, and those growth areas very much leverage our strength, our brand, our distribution network, our compliance and regulatory capabilities and our organization and our infrastructure. And we believe by leveraging these strengths and focusing on our strategies and our strategic roadmaps and being very focused on execution, we can deliver strong returns in each of these areas over the years to come.
So let me first start with the total shareholder return model and give you an outline and then jump into some more details. It first starts with revenue growth. And as Hikmet mentioned, we believe we've got opportunities over the next several years to accelerate the pace of revenue growth as we move forward. Every day we think about how do we grow the top line, how do we gain market share. And as you may recall from the April 24 earnings release for 2012, we shared with you that our outlook for constant currency revenue growth on an organic basis would be in the range of 2% to 4%. But the next several years, we believe we have opportunities to accelerate that, and I'll touch upon that in a few minutes.
And with that accelerated revenue growth, we believe we can also drive margin expansion over the next several years. Again on April 24, we shared with you our margin outlook for 2012 at roughly 26% margins, excluding integration costs, and that's, if you will, consistent with 2011 ex-restructuring costs. But as we look forward and we drive growth and we optimize our operating structure, our operating expenses, over the next several years, we believe we have the business model, the management and the ability to drive margin expansion.
And what I'll also share with you as part of our total shareholder return model is roughly our $1 billion of cash flow we generate every year, very strong consistent cash flow. And just in 2012, through stock buyback, we'll retire 4% to 5% of our shares outstanding. And today, with a $0.10 quarterly dividend, our dividend yield is 2%. So when you add all these things together, you'll see we've got a number of opportunities to drive strong total shareholder return for the years to come.
Let me first turn to revenue. Over the last several years, our revenue growth has been soft, if you will. In part due to the financial crisis in 2009 and the challenging economic environment over the last several years. But what you'll see in 2011, we grew constant currency organic revenue growth at 4%. So we accelerated the pace of growth, if you will. We believe, again, over the years to come, because of our strategies and our ability to execute, we want to drive revenue growth at an accelerated pace.
And those drivers, you're going to hear more from Stewart and Raj and Diane and our leadership team, but as Hikmet outlined, the opportunities, some examples set around our network expansion, our goal to get to 1 million locations or touch points. So our services are very convenient for our customers. And we have opportunities to improve our customer service so at the point-of-sale, it's a great experience for our agent, for our customer, driving increased customer retention. And we're also very keen on offering new services, new products and bringing new customers into the franchise. B2B is a good example of that. And with Ventures and Digital and westernunion.com, again new services and new customers coming into the front door, which will help us accelerate our growth. And then finally, the economy. The economy is always very difficult to predict. But what we believe is that unemployment -- as unemployment improves over time, as income levels increase over time, that will be helpful to our business model and also aid in driving accelerated revenue growth as we move forward.
Let me give you some more color on what Hikmet shared with you a few minutes ago. As you know, we don't provide long-term consolidated company objectives, but I want to give you some more color about how we're thinking about the growth areas as we move forward. Our C2C business, which is nearly 80% of our revenues. In 2011, we grew the business at 4%. But over the next several years, because of adding distribution, improving the customer experience and other initiatives you'll hear from our leadership team, we believe we're well positioned to accelerate the growth in that business.
And if you take our C2B business, recently, you've seen the revenue growth rates begin to stabilize there. And we continue to add more and more billers. And we have opportunities to expand the global footprint there. Brazil is a promising opportunity. And we believe we can grow that business over the next several years in the single-digits. And if you look at our B2B business, we have Western Union Business Solutions. We acquired Travelex Global Business Payments, 2 great companies. We have a 2% market share and over the years to come, we believe we can grow that in the low double-digits.
And then Digital, we're making investments behind Digital. And it very much leverages our brand and our distribution network. We want to get that from $100 million business in 2011 to a $0.5 billion business in 2015, meaning it's going to grow 40% to 50% over the years to come. And then finally, prepaid or stored value. We're only in a handful of countries today, and again it leverages our brand and our distribution network and our customers. We believe we can grow that 20%-plus over the years to come. So when you add all this up, there are clearly opportunities, market opportunities for us to accelerate our revenue growth as we move forward.
Let me now turn to operating margins. What we've experienced over the last few years is margins have not improved. I'm going to use the word flattish. They've been relatively flat the last few years. In part, that's been driven because of the soft revenue growth we've had over the last few years. And we've also -- some factors with some other businesses and the acquisition of Travelex added some incremental cost that will grow through. But what's important here, if you look on the right side of the chart, you will see the C2C operating margins. Over the last several years, those increased over 100 basis points. It's a very leverageable business model, and it's 80% of our revenues. And so we can continue to leverage the C2C business. And as we stabilize and improve margins of other parts of our business, we believe we're set up with our business model to drive margin expansion. And as we accelerate the revenue growth, we believe that will provide the ample investment opportunity to drive margins as we move forward.
Let me spend a few minutes on the margin drivers. I've spent time on revenue growth and how accelerating revenue growth will be a primary factor in driving margin expansion, in leveraging our fixed costs to do that. But also what's important is we will continue to optimize our commissions and our fixed costs. We'll continue to optimize those. But other factors include investments, acquisition and amortization, currency hedges, business mix and compliance with Dodd-Frank.
And I do want to mention Dodd-Frank this morning, that as we begin to implement that, in 2012, we believe we'll incur some onetime incremental cost to implement Dodd-Frank and some ongoing costs, too. But as Hikmet mentioned, we believe our compliance capabilities on a long-term basis are very much of a competitive advantage as we move forward. And so we currently have a team evaluating how to operationalize Dodd-Frank. We have to, if you will, enable 60,000 locations in a short amount of time with training, technology, agent implementation and so forth. So as we get to the second quarter earnings release, we'll share more with you on what those costs might look like.
But turning to margins, over the next several years, as we look at some other factors, acquisition amortizations, in 2012, we have a incremental $40 million of amortization related to the Travelex Global Business Payments acquisition. Right now, we don't believe we'll do any sizable acquisitions. And because of that, in 2013, that amortization expense will normalize, if you will. And also consider business mix. If you look at the B2B business, our westernunion.com where we're making investments, those 2 businesses have margins much lower than the corporate average. And we believe B2B and westernunion.com are very leverageable businesses. And over the next several years, we believe we can grow those margins, those EBITDA margins somewhere in the neighborhood of 30%, consistent with our corporate averages. So as you'll see, we've got many opportunities with revenue growth, optimizing our operating expenses to drive margin expansion.
Let me now spend a minute on our costs, if you will. 65% of our costs are variable, 35% of our costs are fixed. And the biggest portion of our variable costs are agent commissions, are distribution costs. And what's great about it, as we add more distribution, as we add more locations, those costs are variable, which is a very good business model. And then just as we have historically, and our goal over the next few years is to continue to optimize our agent commissions. We believe that we can continue to sign new agents at lower commission rates. In selected agents, as those agreements come up for renewal, we can renew those at lower commission rates. And especially in certain received markets that have gone non-exclusive present opportunities to lower commission rates. And then finally, in 2011, we acquired Costa and Finint, 2 of our superagents in Europe. And how that is helpful is we can eliminate a layer of superagent commission. And as we combine their operating infrastructure with our European footprint, we can create cost synergies there to operate more efficiently, and we believe that will be helpful to our margins as we move forward.
And if you look at our C2C commissions as a percentage of our C2C revenue over the last few years, it's down about 200 basis points. Now I'll tell you, each year there can be some unique circumstances. And as we have negotiations with our agents, at times we may actually have to pay a higher commission rate depending upon the geography or the agent. But if we look at all the initiatives that we have, we believe over the years to come, we can continue to optimize our agent commissions as we move forward.
Let me now turn to our fixed costs. Our fixed costs are 35% of our total costs. And one of our clear opportunities as we accelerate the revenue growth is to leverage those fixed costs to help drive margin expansion. But in addition, we want to continue to optimize our fixed costs. Earlier this year, Hikmet asked me to lead the global operations team, and we continue to see opportunities to improve productivity, to improve processes. Some examples I will give you, and Stewart will touch on this, but at point-of-sale, we can deploy even stronger technology to make the agent and customer experience better but to also make it more efficient and more effective as we move forward. And we have several global operating centers. And we want to continue to drive process improvement there in making sure all activities that are desirable to a low-cost operating center end up in those global operating centers as we move forward.
And we have acquired Costa and Finint and Travelex in 2011, and integrating those with Western Union to create cost synergies is an opportunity. In addition, as we integrate these companies, we want to pick the best products and the best technology. So as we go to market, we're also driving the top line with these acquisitions. So all these things considered, revenue growth, optimizing our operating infrastructure, we believe we've got opportunities over the next several years to drive margin expansion.
Let me now turn to our cash flows, if you will. On an average annual basis, we generate $1 billion of cash flow, very consistent, very predictable. Over the last 3 years, we've generated $3 billion of cash flow from operations. And we've deployed that to invest in the business and to return to our shareholders. And historically, our capital expenditures have run about 3% of our revenues. Now in 2012, they're probably closer to 4% to 5% but on a longer-term basis, we believe that will normalize to about 3%. And any given year can have unique circumstances. What you've also seen in the last 3 years is we've invested in the business through acquisitions. And even with the capital expenditures and the acquisitions, what you can see from the chart is we returned a significant amount of our cash to our capital to shareholders through buyback and dividends.
And we want to continue to do that. So our capital allocation framework on a go-forward basis will be as follows: we want to continue to target a strong balance sheet, consistent with an A- credit rating. And the reason is as we touch billions of dollars, and we do business with financial institutions, banks and post banks, so having a strong credit rating, a strong balance sheet is important. So what that means is we'll have gross debt to EBITDA of 2x and cash on our balance sheet of approximately $1.5 billion. And as we look forward to deploying that capital, we'll invest in the business. And we will also think potentially about some acquisitions. But I would say near-term, we don't expect to do any sizable acquisitions. But any acquisitions we would do would have to have the right cash on cash, strong cash on cash economic returns and first and foremost, have the right strategic fit. And then from there, our goal is really get our cash back to our shareholders. That $1 billion of cash flow gives us a lot of flexibility to do things. And as we think about that, it does require U.S. cash flow for buyback and dividends. And as of March 31, we had $700 million of U.S. cash on our balance sheet. And as we've settled the agreement with the IRS in December of 2011 because of some other planning activities, during the next 12 months, the majority of our cash flows will be U.S. cash flows.
And then you balance that with on a longer-term basis that 35% of our cash flows are U.S. and as our EBITDA increases, our borrowing capacity can increase too. So what we believe over the years to come is we have ample cash flow to continue to return cash to shareholders in the form of dividends and stock buyback.
And to touch on historically what have we done, well, since 2009 we've increased the dividend 4x. It's a $0.10 quarterly dividend that yields about 2% today, and also since 2009 through the first quarter of 2012, we bought back nearly $2 billion of stock. And so as we think about this on a go-forward basis, we're going to have a very much of a balanced approach of returning capital to our shareholders. We've periodically had discussions with our Board of Directors, and we think it's important to have a balanced payout, and that we want to have a dividend that, if you will, represents a fixed return. And our goal there is that as the business performs, over time, we also like to increase that dividend.
But equally important is returning cash to our shareholders through buyback. Given where we believe the intrinsic value of the stock is and the market value, we believe investing in the company or investing in stock buyback is a very good investment, and we'll continue to have an eye to do that.
So let me wrap all this up and put it together, if you will. We believe we're well positioned to drive a strong total shareholder return over the years to come. It will start with revenue and growing revenue at an accelerated pace. You heard Hikmet outline the strategies. You'll hear more from Stewart and Raj and Diane and our leadership team. We believe there's opportunities to continue to grow and grow at an accelerated pace.
With an accelerated growth, our ability to leverage our operating expenses and also optimize those operating expenses, we can drive margin expansion. And then equally what's important is that $1 billion on average, $1 billion of cash flow per year. And Just in 2012, we'll retire 4% to 5% of our shares through stock buyback. And then on top of that is a dividend that's yielding about 2%.
And so when you add all this up, we believe we can grow EPS in that double-digit range in the years to come, add a 2% dividend yield on top of that, with an eye to increase that dividend as the business performs, and We believe that provides for a strong total shareholder return as we move forward.
So in summary, we're very focused, very focused, on driving our strategies and executing as we move forward.
So with that, I want to thank you for your time. And it's my opportunity and pleasure to introduce you to Stewart Stockdale. Stewart leads our Global Consumer Financial Services. Stewart?
Stewart A. Stockdale
Thank you, everyone. It's a pleasure to be here to talk about the Global Consumer Financial Services.
Global Consumer Financial Services consists of 2 major businesses. One is the global Money Transfer business that operates in over 200 countries and territories. It's managed through 5 geographic regions, and you're going to hear from some of the speakers later on today on each of those. We are also talking about our Bill Payment business that operates primarily throughout the Americas, and I'm going to touch on that as well.
If you look at 2011, we had the highest growth rate since 2008. And if you look at the fact that all of our regions grew, we feel very good that we have a little bit of a momentum in place going into 2012.
Our Payments business also returned to growth. It has been growing actually fairly well in South America, and our U.S. business has been recovering, because it was so highly fragmented into mortgages and auto finance, so that was part of the reason. And that's coming back to growth, and you saw growth in 2011.
Scott touched on it a second ago, and if you look at the last 3 years, we certainly lived through tumultuous times. But we actually feel pretty good that the resiliency of the business saw a low of minus 2%, which although we thought would be good, could -- should have been better. The fact that we actually only dipped 2% through 2009, we think it shows the robustness of our business.
If you go back to 2011, all of our regions grew. We're very proud about the fact that North America returned back to growth, and that was fueled by our successful turnaround of our DMT business, which is our largest and one of the most profitable businesses in the company. Europe grew 3% despite a very difficult market environment throughout Europe. Middle East, Africa, grew 4%. And our 2 fastest growth regions, Asia Pacific grew 10%, and Latin America grew 7%, but if you factor in the Payments group business on top of that, it would have grown over 10%. It grew grow over 10%.
So we feel good about 2011. And a lot of what the team is focused on right now is how do we accelerate growth into this year and into the years ahead, and that's what I'm going to touch upon.
If you look at our priorities going into this year, it's how do we assert our leadership in retail? And you would say, "Well, you're already market leaders at retail." But what I'm challenging our teams in every part of the world is how do we make sure that we go out there and really make sure that our mark is felt and that we win and compete for all possible profitable locations in the marketplace.
How do we further expand our customer knowledge? And it -- Hikmet talked about database, and it is about information, but it's how do you use information to really delight and get to know customers, to make sure that we're able to improve loyalty, usage, retention and metrics that are really important for us to move the business forward.
Adjacencies. In North America, 60% of our revenues stay in North America, and that's because we have a lineup of products and services that complement our cross-border business that really allow us to go what I call deep in that market. And you're going to see a little bit about that going to other markets around the world.
And last but not least, making sure that our operating model is scaled and fit for growth so that we cannot only implement the core business objectives but also put through the pipes other products and services, as Hikmet illustrated earlier.
Expanding the retail presence. Accelerate location growth. I call it competitive takeaways. There are a number of very prominent competitors out there. We're very competitive in almost every region in the world. Sometimes, they're global brands, and sometimes, they're very niche players. But we're out there competing for all of the deals and making sure that we have our fair share of wins at the right margins for our business.
Filling white spaces as well. There's a lot of non-sellers out there that we want to bring into the franchise. And you're going to hear from Victoria, but we've had a number of banks in North America, like Bank of Montréal and Acxsys up in Canada. We've got UniCredit and Intesa Sanpaolo. So there's a number of global wins that we're seeing in just in the last few weeks and months that will continue to bring into the pipeline and that volume as we -- as they become active.
And last but not least, we're spending a lot of time and resources at building a -- not only a sales culture but a sales team that is unparalleled in the industry. In the last few months, we've added 150 salespeople across the world primarily in those key send regions to make sure that we're competitive in winning those key accounts and white spaces in key send and receiver locations around the world.
We're very proud of our leadership in postal networks around the world. They have been a cornerstone of Western Union for the last few years. Part of our objective is continue to grow and diversify our classed of trade. And in the last few -- couple of years, we've talked about penetrating the banks in North America. And if you go back only 4 years ago, we had very small number of bank and retail locations in the United States. Victoria will talk more about it, but we made great progress on banks in North America.
We're accelerating -- on the other side, North America grew up with retail. In the Europe, you grew up -- we grew up with post banks and with banks. And now retail is becoming a much more important and growth area for us in that particular market, and I'll talk a little bit more about that in a second.
And last but not least, we're also talking about flagship locations that are locations that we run and operate ourselves, our introduction into ATMs, with over 30,000 ATMs already, kiosks in self-serve type locations and convenience stores. So if you think about it, think of a Coca-Cola model that within a few miles or a few little steps from every location you are, we want to make sure that you are able to have a Western Union service location where you could send, receive money or transact a number of other products.
Just a little deep dive on North America banking. We started really penetrating the category, as I said, 4 years ago. It now is continuing to build momentum. We recently signed a number of major signings, and we think that there's more in the pipeline. Very importantly, ABMT or what we call account-based money transfer, which is a transaction that originates from an online account holder at that particular bank and ends up either at retail or at another account, has now become 20% of our volume in our banking class of trade in North America, and we really only just started launching that. Also very importantly, our ABMT product line across the world is growing at 45%. So that's part of our electronic channel strategy that is really paying dividends.
Also very importantly, we believe and know it's a fact that as customers come into the banking class of trade, it's usually a new type of customer who is actually putting more through the pipes or sending more principal on each one of those transactions. So it's a new customer. It's a very profitable customer. And if you look at the commissions that we pay to the banks, they're not all that different than we pay at retail. So it's not something that we have to worry about as far as margin.
On the other hand, if you look at our European distribution base, we -- over the last number of years, last 2, 3 years, we have acquired Costa, Finint and Fexco. So that gives us direct line of sight to those agent locations in most of Europe. Jan Hillered will speak more about it. But what's really important is we've now consolidated that operation under a common sales leader that really will take that go-to-market, integrate those 3 acquisitions and really operate more of as us being the master agent in Europe. And the results are very promising so far. We do know that a lot of migrants in Europe do prefer to do business at a retail type location. Now that complements our financial services and our post locations very nicely. So it fits into our overarching strategy of how to grow the European base.
Agent value proposition. If you look at -- what Scott was talking about is our largest cost of business is commissions that we pay. Now I argue that that's a really good cost, because it's usually used -- it usually utilizes other people's money to distribute our products, so it's money very well spent. But we do have a strategy in place over the course of the next few months and years on how do we continue to optimize that.
And if you look at the top right-hand corner, what we call as some agent locations are really going to be strategic partners of ours. And that's great, and we want them all to be in that bucket, but they won't all be in that bucket. On the bottom right, there's going to be locations that we're going to want to optimize, and we're going to aggressively optimize commissions. On the top left, it's actively retained and what do we need to do to retain certain customers. And sometimes, that may be a little expensive that we have the make calls on whether we want to keep it or not. And then down at the bottom left is where do we negotiate really aggressively, okay? And so there is a strategy in place.
Now what is true about our business is that our agents love our business as much as we love them, because what's really good is that our brand and our customer base bring traffic and margin to most of our agent partners, okay? Think of what I said. They bring traffic and margins to their locations. So with that, I'd like to show a very brief video that highlights some of our key agents on a global basis. Can you run the video, please?
Obviously, we have a great relationship with our partners. And as I've gotten to take the new role on a global basis, I've really gotten to meet our agent partners on almost every corner of the world.
It is my distinct pleasure to introduce an individual that's truly been a pioneer and friend of Western Union. He started the business only a few years ago with 400 locations in India, quickly grew that to 10,000 locations and most recently, surpassed the 40,000 location mark in India, representing a significant part of our India business, which is 100,000 locations and also a significant part of Western Union.
A dear friend of Western Union, I would like to introduce Mr. Chetan Mehra, Director of Weizmann Forex Limited, ladies and gentlemen.
Chetan D. Mehra
Thank you, Stewart. Ladies and gentlemen, good morning and namaste. In India, Western Union does more than just transfer money. It transforms lives. In fact, India consistently has the largest share of remittance amongst all countries receiving money from its expats. Last year, the amount received was over USD $64 billion.
Our interest with the business dates back to 1998 at a time when the awareness level for Western Union was low, and the network was just 2% of its present size. Over the last decade, our team has grown exponentially. And from a single-digit start of more than -- from a single-digit start, it has grown to more than 1,700, spread over 400 towns and cities. We paid out during 2001 USD $1.8 billion.
Obtention of the regulatory approval for network expansion via the subagent route coinciding with the turn of the millennium was the inflection point for the business. The stupendous effort of the corporation and its agent partners can be best exemplified by the fact today that Western Union network size exceeds the combined network of all the banks in India.
100,000 locations, spread pan-India. 1 out of every 5 locations worldwide is in India today. With a brand awareness of 98% and high compliance standards, Western Union has successfully mainstreamed the remittance market from the hitherto popular unofficial channels.
The growth volume followed by Western Union and its agent partners is pretty much explained by a simple philosophy, and we heard Hikmet articulate this in his presentation: create business and the network will follow. This philosophy has insured that the network extends across the length and breadth of the country with equal emphasis on high street locations and remote white spots. The unsung heroes of this stupendous effort, the field force, annually travels about 35 million miles. And they're logging 800,000 hours, yes, 800,000 hours of effort to source and service these locations.
We at Weizmann are extremely proud of our association with Western Union. The India growth story is compelling. The current population of India is 1.22 billion and is poised to grow to 1.37 billion by 2021 as per Population Bureau. 72% of this population lives across 600,000 villages, and 28% lives in 5,500 towns. Ladies and gentlemen, 51% of Indian population does not have access to bank accounts and lacks access to financial facilities. With its 100,000 locations, Western Union is ideally poised to tap the Indian demographic story and meet the aspiration level of its vast majority of unserved population.
Moving to new products. Small and medium enterprises contribute 40% of the manufacturing sector and 25% of the country's exports. The -- these enterprises are presently serviced by traditional methods, like via transfer and DD. These are time inefficient and expensive.
Launch of prepaid cards is on the anvil, and to cater to the aspiration element of the unbanked segments of society, we hope that this would really transform the way business is done in rural pockets of India.
Finally, ladies and gentlemen, I began my address by mentioning that Western Union more than transfers money. It transforms lives. And the emotional connect of this statement can be best demonstrated by the gesture of a small village in Punjab that has named its town square as Western Union Town Square. That, ladies and gentlemen, is the power of Western Union as a brand. Thank you.
Stewart A. Stockdale
Thank you, and I trust you get the sense for the magnitude of Western Union in India.
If you look at the next stage that I'm talking about is really how do we improve the customer experience. It's a big focus since Hikmet took the reins as CEO to transform what was a transaction-based company to a customer-centric company. It starts with data. It starts with customer, but it's measured in results. As I said earlier, things like usage, retention and usage are key in loyalty -- I'm sorry, are key to making sure that we could move the needle in making sure that our customers stay with us a little longer, use us a little more often.
An illustration of that is, what we're testing here in the United States here in the next few weeks, is our new point-of-sale. It's not a kiosk. It's not a standalone but think of it more of an airport check-in, where you have an assisted technology with an FLA. So that it will improve information, speed, data, customer analytics and really speed up the transaction for our agent partners and our FLAs.
So I'd like to show a very brief video that talks a little bit about what we're putting in the market here in the United States in the next few weeks as a test pilot, and hopefully, we'll expand it.
Not only are we deploying these units, but some very large retailers are adapting it into their core systems to be able to present this to the FLAs in their locations.
Pursuing adjacencies. I talked about going deep into what we did in the United States. Part of that is going to be expanded into other parts of the world. How do we take other products and services and complement the phenomenal brand and distribution with agent partners in key parts of the world. I call it fill the bucket.
What we do know is that when a customer uses us with more than one product, our revenues are significantly higher. What we also know is that when an agent sells more than one of our products, their loyalty to us goes significantly higher. So part of this strategy is to take different markets around the world, and to do it in an organized fashion is to start adding the products and services in select markets. And we talked about Prepaid. We talked about Business Solutions. We talked about intra-Money Transfer. We talked about account-based money transfer and so forth. You'll start to see us go into other countries and territories, in what we call must-win markets, and push them down. A key example would be Brazil, where we recently got a bank license and which will allow us to really expand the product set and really go beyond the core Money Transfer business that we've done historically.
Briefly on Payments. I love this business. For those that track it for us closely, it does 3x the number of transactions that we do on our Money Transfer business on a global basis. So we do 600 million transactions on the Payments business. It's mostly an Americas business. The U.S. is coming back. South America has been growing strong. We've been adding a number of products and services that complement the retail and the electronic.
We have 10,000 billers, and we're expanding that aggressively. We're pursuing new vertical -- new verticals, so new categories of billers that go way beyond the mortgage and auto strongholds that we've typically had. We've recently launched a small business portal that would allow billers to sign up electronically and will allow for mobile and different technologies to be utilized as payment tools, including our own WU.com, including our own mobile applications. So part of it is to continue to grow this business. What is very important is that our retailers also love this business, because it gives them traffic. It gives them margins. It gives them visitations. So it's something that we really look to pursue, and you'll hear more about the expansion in key parts of the world as we roll out Payments to other markets like Brazil.
Last but not least, I want to leave you with the 4 thoughts that I talked about when I started my presentation: assert our leadership at retail to grow the core; improve the customer's experience to be able to move the needle on uses and retention and loyalty; pursue adjacencies so that we go deeper in key markets; and last but not least, make sure that we have the right operating model that will allow us to grow and bring all of these things into operational gear.
With that, we're going to start the presentations with our regional teams. The first one I'd like to introduce is our Senior Vice President and General Manager for Europe and CIS, Mr. Jan Hillered. Jan?
Thank you, Stewart. [Swedish] Welcome. I am Jan Hillered. I'm a Swedish national, and I manage Europe and CIS.
Europe and CIS is Western Union's largest outbound Money Transfer region generating 24% of the company's revenue or $1.3 billion last year. Six markets in the region are among the global top 10 send markets and generate more than 50% of our revenue. With a total market opportunity estimated to about $250 billion and with around 80 million of the world's 200 million-plus migrants, our growth opportunities in the region are abundant.
The base of our distribution model is our physical network, with more than 140,000 locations. We have more than 550 network agents in the region, many of whom had been with us for a very long time. A great example of such a network agent is Correos, the Spanish post, with about 2,260 locations. Yesterday, we were very proud to announce that we have renewed our contract with Correos until 2017. The relationship with Correos dates back to 1999, and Western Union is Correos' oldest corporation partner. Agents like Correos, the German post bank, the French La Banque Postale that you saw earlier, the Swiss post, they have all been working with Western Union for decades, and they create a very stable backbone distribution in the largest European send markets. Our physical network is also including about 30,000 retail locations, and they provide an excellent complement to the large network agents in terms of ethnic focus, opening hours and convenience.
Western Union International Bank is a very important part of our distribution in Europe. Based on its pan-European licensing capability, we are building the basis for new products and channels like WU.com, Prepaid Cards, Western Union Business Solutions. The bank also manages our network of European flagship stores in markets like Germany and France, with 1 million customers of their own. This network is owned and -- of owned and managed locations drives a substantial share of our business in these countries and sets a benchmark for the customer experience in those markets.
With 19 of the company's 23 WU.com transactional sites, our online Money Transfer offering is an integrated part of our service to customers in all send markets. The 19 of the company's -- sorry, we have activated account-based money transfer with 22 banks in 14 countries, and we have a very robust pipeline of banks that wish to offer the service.
The region has also pioneered Money Transfer by ATM, and we now have 23,000 ATMs in 6 countries active. And here, I would like to mention one bank in particular that we signed and launched last year, and that is Intesa Sanpaolo, one of the top banks in Italy. They offer Western Union Money Transfer in all of their electronic channels, on ATMs and on their banking and mobile banking portals. During the last 2 quarters, we have also launched prepaid products in the U.K., Germany and Austria. More countries will follow, and we will hear more about that later.
Now it would not be possible to talk about Europe without also talking about this. The media stories we are fed with on a daily basis are symptoms on structural problems in the finances of several -- luckily not all, but in several European countries. Broadly speaking, we can differentiate between the north, represented by Germany, Netherlands and the Nordics and the more affected south, represented by Spain, Italy and Greece.
Now what does this all mean for the growth of our business? Well, it clearly affects several of the drivers of our business growth in the countries that are impacted, especially economic -- the level of economic activity, unemployment and net migration. As you can see from these graphs, most estimates that -- most estimates show that 2012 is probably going to be the worst year in the cycle. Unemployment is at historical highs. Consumer confidence remains low and net immigration to the area is estimated to be at about half the precrisis levels.
But all is not bad. Based on our research, migrants are not returning to their home countries. If they move, they move to other parts of the region with better prospects, like Germany, France and the Nordics. Secondly, we also see good response to our investments in improving the customer experience through network expansion, corridor promotions, marketing initiatives, product launches, et cetera. Let me go a little bit deeper into a couple of these growth initiatives.
The new European retail initiative Stewart mentioned earlier has been a big success. Since the launch of the Payment Service Directive in Europe, in the European Union at the end of 2009, we have opened up new classes of trade for distribution of Money Transfer services in large markets like Germany, France, Netherlands and the Nordics. In 2011, we were targeting to generate $50 million incremental revenue for the company from this initiative alone, and I am proud to inform you that we generated over USD $62 million. We recently announced the activation of our 10,000th new retail location, bringing the total number of retail locations in Europe up to 30,000, and we're not stopping here.
In the first quarter of 2012, we have increased our sales force by 40%, and we see big opportunities for continued growth from this part of our business in all markets where we're active. Our target for 2012 is double-digit growth from our new retail -- our Europe retail locations.
An example of how to create new opportunities in our core business through repositioning of our standard Money Transfer product is the launch of Euro Money Transfer in 2011. Building on the success of the U.S. domestic product, we launched the largest-ever price repositioning done in Europe, involving 17 countries and over 260 corridors with a EUR 4.90 price tag in the lowest band. The results have been very encouraging. This was a business that was flat in 2010, and it is now growing double-digit, with the highest growth rates we have seen in over 4 years, and our market share in the domestic Money Transfer has doubled in 4 of our top 5 markets since the launch.
Before finishing my presentation, I also want to brief you on our recent acquisitions and give you an update on Russia. The acquisition of our Master Agents, Fexco, in 2009 and Angelo Costa and Finint in 2011 is transforming the way that we go to market in the region. This change, combined with the opening of our regional operating center in Lithuania, will give us the possibility to gain scale and efficiency in the core processes related to our retail agents. We are integrating the in-country sales forces and the agent-facing operations. We are consolidating activities, resources and systems, and simultaneously, we improve our profit margin. Most of the savings will be derived from an improved commission structure, consolidated operations and efficiency gains.
We have previously informed you of our challenges -- of the challenges we are facing in our Russia business. Russia is one of our most fiercely competitive Money Transfer markets. It is a nonexclusive fragmented market that previously only allowed money transfer in licensed financial services institutions. The market was recently liberalized by the introduction of the National Payment System Law allowing for services to be offered also in retail. Western Union has a very strong position in the market with the largest network, the best brand awareness and very strong local market presence since over 20 years.
Our strategy to win in the Russian market is based on 3 pillars: network expansion, brand initiatives and price repositioning. Over the next 3 years, we will double our network in Russia. We have already entered the retail class of trade by signing our first retail agents. We have hired a sales force that is now actively selling in the market. Complementing our physical distribution, we will also launch Money Transfer in self-service kiosks. We have already signed one of the leaders among the kiosk operators, and we'll activate the service later this year. Finally, we are implementing a new tiered pricing structure that is better suited to satisfy customer needs. I am confident that we have a robust plan in place, and we'll turn the Russian market in the near future.
To summarize, I'd like to reinforce some important points that I made in my presentation. Firstly, Western Union has, by far, the strongest Money Transfer franchise in Europe. We are the preferred partner for any player that wishes to be in the category. In the last 5 quarters, we have signed 94 new network agents, and not one single of our existing agents have left to the competition in connection with a contract expiry.
Secondly, we focus on the needs of our customers, and we actively manage our portfolio corridors. During the last 4 -- 5 quarters, we have launched 76 corridor initiatives aiming at striking a good balance between market share growth and preservation of profit margins.
Finally, we will continue to expand our network. We invest in our sales force, and in 2012, we will activate over 10,000 new locations across the region.
I hope, by now, that I have been able to give you a good feel for the challenges but more importantly, for the opportunities that we have in Europe and CIS. In many ways, 2012 will be a year of transformation for the region, but there is no doubt in my mind that 2012 will also put us firmly on a trajectory of accelerated growth as we move forward into 2013 and beyond.
Ladies and gentlemen, thank you very much for your kind attention.
Ladies and gentlemen, please welcome Senior Vice President, Middle East and Africa, Jean Claude Farah.
Jean Claude Farah
When Mohamed Bouazizi set himself o fire on December 17, 2010, in protest of the confiscation of his wares in Sidi Bouzid, Tunisia, few anticipated that his action would trigger a string of revolutions throughout the region.
As you have seen in the movie, riots, protests and conflicts started happening everywhere. This has caused the interruption of Western Union's services in a number of countries, a situation that required swift action to carefully monitor developments and their effects on the lives of the people in Middle East and Africa.
As-Salaam-Alaikum, bonjour, and good morning, ladies and gentlemen. My name is Jean Claude Farah. I'm a Lebanese national heading the Middle East and Africa business for Western Union based in Dubai, U.A.E. Thank you for joining us here today for this brief journey into a region that went through a lot in the last 18 months and still living a series of change and transformation.
The Middle East and Africa make up a region of 66 countries in which we operate. We have a team of 120 seasoned professionals covering business development, operations, marketing and key support functions who generated $860 million in 2011.
We have resilient, strong and performing markets, ranging from the world's second largest outbound remittance market, the Kingdom of Saudi Arabia, with its $27 billion outflow; through high GDP countries, such as the United Arab Emirates, with an estimated $358 billion in 2012; ending with promising manpower exporters like Morocco, with its 4 million migrants spread across Europe.
In the past year, Western Union continued to build a solid infrastructure that includes a network of nearly 40,000 agent locations. Our brand awareness reached a staggering 88%. The region keeps a 43-54-3 balance of outbound, inbound and intra activities that enhances its resilience. We love the change taking place in the industry and diversified our portfolio to include new touch points, signing 14 mobile operators for Mobile Money Transfer and 21 banks for account-based money transfer. In short, our reach extends the both our customers and agents, collaborating with key strategic partners regionally and in different countries including, but not limited to, the likes of Société Générale, Ecobank, Bank Al Bilad and Cairo Amman Bank.
As you have witnessed in the video, what is known as the Arab Spring created several challenges. However, the Middle East and Africa team was discouraged neither by war nor by riots but was driven by the dire demand of individuals needing cash to survive. We worked relentlessly to ensure there was minimum impact on our operation in those countries. Currently, the region is experiencing a return to moderate economic growth and with the evolving economic and political environment come opportunities.
With $120 oil price, the region has a lot to offer. For example, we started to witness increased Arab migrants influx from countries like Yemen and Egypt to the Gulf countries. We also witnessed reversed migration patterns from Europe to the region. It is common now to find Spanish and Portuguese settled in the fast-growing economies of the emerging world, like Angola and Mozambique. Who would have thought?
Whilst the environment continues to change, our focus remains the same: our customers. What do they need? How are we going to deliver on their expectations? What are we going to do to make sure they chose us over others? We can overcomplicate things if we chose to. However, the path to success is clear. If we put the customers at the center of everything we do come, if we listen to their voice and execute up to their expectations, growth will be at the rendezvous.
Staying focused on our customers helps us withstand challenges and be ready to rebound when the time is right. Our service availability is key to continuity with of our business. Even in the most difficult situations, we continue to serve our customers.
During the Arab Spring, none of the crisis-affected countries was shut down for more than 21 days. We even operated at ad hoc times to facilitate our customers' access to cash. We continued signing new agents, expanding our network to over 460 agents across the Middle East and Africa. And against all odds, we opened new countries, namely Namibia and Somaliland.
We also nurtured growth in other arenas. We diversified our portfolio, introducing new channels and new products. In 2011, we formed relationships with a variety of organizations in the region, including banks and mobile phone companies, to enable our consumers to send and receive money how, where and when they want. We now have 6 active accounts-based money transfer banks, including Emirates National Bank of Dubai in the U.A.E., where the service is currently available online and Absa Bank in South Africa. We continue to support these activities with our loyalty programs and enhanced visibility through branding campaigns and tactical marketing promotions.
Let me give you a concrete example on how we drove growth in the region. In the region, we have over 8.5 million diaspora from Asia Pacific, whose main purpose of being here is to support their families back home. In the past decade, we spent quite some time and effort getting closer to our customers. We built a team that understands the particularities of the different societies. Our community consultants speak every dialect to communicate with our consumers at every level, should it be at the tea shop around the corner, at the community fair in the park or an exclusive meet-and-greet with a Bollywood star like Shahrukh Khan. We appeal to their senses and influence, their decision making.
We stayed focus on our customers. We listen to their voice, understood their needs and executed on our findings. You can see for yourself the impact it had on our business. In 2010 and 2011, we grew at 4% and 6%, respectively, despite the economic downturn, the Arab Spring and all the upheavals that the region went through.
In closing, we expect long-term economic growth in the Middle East and Africa. This is a region that is primed to grow. Traditional markets remains strong with rebounding Gulf economies and emerging countries in Africa. From our side, we have built a strong infrastructure, expanded our portfolio and opened crisis countries in record time, and we will continue to grow and introduce new touch points.
In September 2010, on our Investors' Day, I said Middle East and Africa is a region that is being built to serve many generations to come. Our belief was and still is if you build it, they will come. And what I shared with you in the last 10 minutes shows that despite all the events, we built, continue to build. They came and continue to come. Whilst the happenings of 2011 and present bring the world's attention to the region, Western Union team in the Middle East and Africa promised, delivered and will continue to do so.
Ladies and gentlemen, thank you very much.
It is now my pleasure to introduce my colleague, SVP for APAC, Mrs. Drina Yue.
Drina C. Yue
[Chinese] Good morning, my name is Drina Yue. I manage Asia Pacific, based in Hong Kong. In case you've forgotten my name, no worries. Just say, "Hi, you. It's me." Can't be wrong.
Well, allow me to share a few data about Asia with you. We have presence in 44 countries, our 2011 revenue is about $660 million, and our top inbound markets are India, Philippines and China.
Now moreover, we are focused in capturing the growth in Asia, so we're developing outbound corridors as well. As you heard from the video before, Malaysia, Australia, Singapore and Hong Kong, we're capturing and developing outbound corridors as well.
Now from those 44 countries, we have over 210,000 retail locations presented by 254 agents. And half of those agents are banks, which puts us in an excellent position to provide account-based money transfer. With that, we have signed 25 banks to provide account-based money transfer and 7 mobile operators providing Mobile Money Transfer services.
Now everything Asia is talking about is growth. We have a 5-point strategy to capture such growth. First, customer-centric. We know what our customer wants, their needs. We want to provide estimate best-in-class services so that when they want to transfer money, either they are in their home country or they are away from their home country, working in a foreign country, when they want to transfer money, they think Western Union.
Second, Asia now is predominantly an inbound region. So we're working very closely with my colleagues to know what to do, do the right market programs, marketing to the right segment at the right price, at the right time and even have the right ethnic agents so that our customers are more comfortable when they come in and do Money Transfer.
Also, I'll explain a little bit more later, Asia is growing. So there are what we call intra, within Asia, corridors and retail Money Transfer that we're building, also developing outbound, grabbing that growth. We'll also continue to expand our retail network and enabling new channels so that we can provide new services, acquiring new customers, penetrating into new customer segments for further growth.
Actually, 2/3 of the world population lives in Asia. Top 10 receiving markets, 5 of them are in Asia, namely, India, China, Philippines, Bangladesh and Vietnam. Actually, Indonesia is very close to getting into the top 10.
I mentioned we'd looked into not only expanding our growth in our core Money Transfer business but also looking into the possibility within Asia capturing the growth of intra-APAC and outbound. So if you looked at 2008 March numbers compared to this year March numbers, we have grown outbound from 8% to 10% and grown within Asia, we call it intra-APAC, from 25% to 32% as even the pies were growing bigger and bigger year-over-year.
Why is that happening? A number of obvious answers. First, GDP growth. If you looked at countries like India, China, Malaysia, well over 8% for the past couple of years on GDP. Actually, on the average, a lot of countries fared a little bit better than the world GDP growth in their countries. Also, a few of the countries, like Malaysia, has exceptionally aggressive what I call development projects, agendas. Infrastructure growth is one of them. So what do they need? Migrant workers. And there are some countries that -- aging. Aging needs support, so they need service industries. So all in all, that puts us in a region that we are focused in capturing the growth, not only inbound but also outbound and intra-Asia. So we have countries like Australia, Malaysia, Hong Kong, Singapore. You were talking about the Malaysia, the Indonesia, which you saw in the video and Taiwan, Korea, Japan and New Zealand, all that.
Now channels. We talked about India, as our dear friend and agent partner, Chetan, had talked about India. It's a market of $64 billion of remittance. We have over 100,000 locations. We are the leader in cash-to-cash or retail Money Transfer services. Are we happy? Yes. Are we satisfied and stop there? No.
What we want to do is cross-channel, get into newer markets segments, so look into what we call direct to bank, which is actually retail to account, another $9 billion that we can get into; account to account, another $14 billion market that we can get into. So account-based money transfer is one thing and another new product, prepaid. We're ready to launch prepaid this year to continue to capture the growth of our markets.
Let me get into another -- a little deeper into Japan. 18 months ago, when we had invested a -- reported we were the first international money transfer company that was granted a money transfer license in Japan. The last 18 months, we were able to expand in all 4 channels to tap the $5 billion market.
First, retail. We'll continue to grow our retail locations. Second, online. You can transfer money online. Third, ATM machines, works 7/24, covering all over Japan, 16,000 of them. And these machines are very smart. Not only that you can use ATM card, withdraw from your account and send, you can also put money in. It counts cash too. And then retail, over 9,000 of kiosks in convenience stores. That puts us in a very good position to grow and be -- and we already be leader and will continue to be the leader of money transfer in Japan.
Now we've talked about core business. We've talked about retail, Money Transfer, cash to cash. Actually, we're expanding, what we call pursuing adjacencies, to other channels with new products so we can get into new customer segment. I mentioned 25 banks that we have signed to provide account-based money transfer. We have launched in India -- I'm sorry, launched them in Indonesia, Philippines. We have pilot in China. We're going to launch it in India.
Also, self services. I've mentioned kiosk machines, Japan and China, over 10,000 of them; ATMs, over 60,000 of them; WU.com transfer online we have in Australia and New Zealand. By the way, it's doing very well. And Mobile Money Transfer, we've signed with 7 operators, offering in 4 countries. And you saw the video also. We are a payment partners of alibaba.com. So you can select to pay cash to pay for what you purchase online.
So in summary, we are poised to capture the growth in Asia, tap the untapped, serve the underserved for our core business. Also, we are focused in driving new corridors. We are focused in pursuing adjacencies to new channels so we can capture new customer segment, new customers and further our growth.
So that concludes my presentation.
With pleasure, let me introduce my colleague, Victoria Lopez, who is going to talk about North America. Thank you.
Good morning. I'm thrilled to be here, and thank you for joining us today. And thank you, Drina.
I'm responsible for our North America business. Our North America business spans 3 countries. Last year, it generated $1.7 billion in revenue. Our top corridors our U.S. to U.S., U.S. to Mexico and U.S. to Philippines. But let's go a little deeper.
This region spans 10 time zones, from Hawaii, to Caguas, Puerto Rico; from Fairbanks, Alaska to Yucatán, Mérida. We serve millions of customers every day, 24/7, who rely on Western Union to send their money to their loved ones, to pay their bills, to get money orders, to get a prepaid card to manage their finances.
Going a little deeper, in North America, we have 70,000 locations. We pride ourselves on longstanding relationships. Western Union -- and Stewart talked about this. Western Union brings an identifiable brand that brings new customers. But more importantly, we bring the glue for relationships, relationships with our agents, relationships with our customers.
Let's talk about a few of our agents. Kroger, you saw in the video earlier. Kroger has the same commitment that we do to longstanding relationships with our customers, to building customer loyalty, to serving our customers. And 32,000 locations, they're the second largest grocery chain in the United States.
Rite Aid. Right has 4,700 locations, basically on the East Coast and the West Coast, in 31 states, and the District of Columbia. They're the third largest drugstore chain in the country.
U.S. Bank. The fifth largest commercial bank in the United States, with 3,200 locations, serving customers day in and day out with Western Union services and products.
Scotiabank, serving 7 million customers online and with mobile; Fifth Third Bank, with almost 1,700 locations; Regions Bank, with 1,600 locations and incorporating Western Union services to their new banking strategy; recently, Bank of Montréal joining us; and SunTrust, with almost -- that we're excited that we're soon going to deploy in almost 1,700 locations. And then Banamex and Elektra, with whom we had a longstanding relationship in Mexico and jointly service millions of customers throughout the years.
So let's talk a little bit about our strategies to deliver growth. First and foremost, the customer at the center. We need to enhance our customer and agent experience. We need to continue to expand and diversify our distribution footprint, broaden our product portfolio, continue our U.S. payments turnaround and evolve and improve our Mexico business. Bottom line, it's all about seamless execution and continued growth.
It all begins and ends with our customers. We have 20 million Money Transfer customers in the United States. Our customers are landscapers, nurses, accountants, professionals, hotel staff. And during this economic crisis that we've had, they have been resilient and resolved. And Western Union has been there to support their needs, to help them move money, to help them manage their money and pay their bills.
Stewart talked about to fill the bucket. The United States exemplifies this strategy. We have all the products and services, Money Transfer, Bill Pay, money order, goCASH, prepaid. We strive to be where our customers are. We strive to be where they need us to be, when they need us to be.
So in these times, we see it as just as important to acquire new customers as to retain new customers. Because in times of crisis, customer loyalty falters, and we pride our customers too much to let them falter. So when we see customers that have more than one Western Union product or service, we see that they almost double their frequency in sending money. When we have -- when we see a -- customers that have more than one Western Union product or service, we see a 10% increase in customer retention.
Let me share part of our success. Stewart alluded to it, and if you were here with us 18 months ago, you heard about our Money Transfer turnaround. And it's a perfect example of how we can be customer centric and succeed with our customers.
The domestic Money Transfer business had been basically lagging for several years. In late 2009, we repositioned that business, and we launched a new price point, the $50 for $5, and that drove higher frequency. It drove almost 35% growth in transactions. It brought new customers. So let's peel back a little bit, dig down and understand why.
Part of the drivers -- part of the one of the drivers of the domestic Money Transfer turnaround success is the short distance sense. The reason why is the $50 for $5 price point made sense for small distances. Small distances, small amounts are not new, but the price point generated a value proposition that made sense to our customers. It competes with the price of gas. We also offer a receipt for customers that are paying other customers for small loans. And very importantly, it makes a value proposition for our customers to -- that want to send more frequently, more often, rather than less frequently, less often. It has grown our short -- our short distance intra-city sends have grown from less than 10% toward 20% of our total volume. We understood our customer needs, and we responded to them.
Moving forward, Stewart spoke about this before, we're growing momentum. We're accelerating pace with our banks in the United States both at retail and account-based solutions. Again, it's a win-win proposition. We bring account-based money transfer to our banks, which offers our banks a new revenue stream. It optimizing -- optimizes existing deposit relationships, and it optimizes their channels and bottom line, provides channel preference for our customers.
We are -- what exemplifies the success is our recent partnership with Acxsys. With our account-based money transfer, with Acxsys, we will be able to bring to Canadian banks and for their customers account-based money transfer solutions across Canada. The best example of success is Scotia. With 7 million customers today having -- at their fingertips with online and online -- and Mobile Money Transfer, 200 countries at their fingertips.
And then retail expansion via independence. It's ubiquity. We need to be where our customers want us to be. It's the white spaces. Where do they need us? Where do they want us? Where do we speak to their needs?
And growing Mexico for better. We've been in Mexico over 150 years. Mexico is the perfect example about how Western Union evolves with its agents and evolves with the environment. Mexico is the 12th largest country in terms of population, with 111 million people. 50% of those people are under the age of 25. It is estimated that 28% is in informal activity of all the economic activity. There's a huge opportunity, and the market is evolving extremely rapidly.
With Elektra and Banamex, we've had a longstanding relationship, and we're evolving that relationship to be able to expand our services and channels in Mexico. Mexico has been traditionally a receive country. We're growing our outbound Mexico to the world business, and you will be hearing much more in terms of how we're diversifying that country -- that business to drive our Western Union brand equity.
In closing, it's all about execution, flawless execution for growth. We are improving our products and services for sustained growth. We have solid momentum with our banks. We continue to expand our distribution and product diversification, and we're investing in Mexico to accelerate our growth.
Thank you very much for being here. And I'm very thrilled to present Odilon Almeida, Senior Vice President responsible for Latin America, South America, Central America and Caribbean.
Bienvenido. Welcome to Latin America and the Caribbean.
I only speak 3 languages myself, but I don't know if you knew that there are more than 37 languages and dialects spoken in the region. For Western Union, Latin America and the Caribbean is composed by 48 countries and territories. We have countries as large as Argentina, Brazil, Venezuela and others as tiny as Belize or Granada.
In fact, the international expansion of Western Union outside of North America started in Latin America and the Caribbean. It was the year of 1989, and everything started in a small island called Dominican Republic. Ever since, a strong network of agents has been built.
Our core agents have been with us for more than 15 to 20 years, and we have all sorts of them within all classes of trade. We have powerful banks like Banco do Brasil, like Bradesco, important retailers like Walmart in Argentina, Falabella in Chile, living side-by-side with entrepreneurial agents like Winnick, Thompson & Co. in Granada. A very impressive retail network with more than 40,000 locations. But we have not stopped there. We entered into account to retail -- to the account and retail segment in a big way in the last years. Today, you can send money directly from your bank account on the phone to any of our 500,000 locations around the world in 5 countries, in Argentina, Brazil, Chile, Ecuador and Peru.
And we go back to that. Western Union has enabled 150 million account holders within 350 banks in 5 countries to send money directly from their account on the phone without going physically to our retail network. This has been very powerful for us and we think it's going to be a very important part of our growth going forward.
Besides that, we have our payment business. And I have this business very close to my heart. We -- after the acquisition of Pago Fácil in December 2006, we start to expand that services to other countries. First of all, Peru, Panama, then Venezuela, then lately, Brazil. That expansion is going quite well. And those countries together, they already represent the bulk of potential bill payment in the region. But there are more still -- there are still more countries to come.
But let me go back to the Pago Fácil acquisition and spend 2 minutes on that. Let me give you some figures about Pago Fácil. Pago Fácil is this massive mainstream walk-in bill payment business we have in Argentina. We make today 18 million to 20 million transactions a month, make the numbers more than 220 million transactions a year in a country with 38 million people. So you can understand and imagine that penetration on the population that we have. We have more locations than all the banks together and like the local team likes to say, "Well, you can find a Pago Fácil store in every corner in Buenos Aires."
It is -- when you talk about the acquisition of Pago Fácil, I think it would be fair to say that it surpassed our previous expectations in many way. Besides the numbers that have been much above what we first expected, it was all about the capacities and capabilities that we bought. Capacity is talking about the [ph] systems, the process of the business, the way we do business, and capability is about the skill of the team that came with it, all the team, the main leaders that are still with us today. I'm very -- I think it would be fair to say that without those skills, and without those capacities, we will not be successful as we have been in the expansion of Pago Fácil around Latin America and the Caribbean.
If we had all of these together now, if you put together the Payment business, the account-based money transfer, our focus behind outbound, about intra-region, if you put all of that together, Latin America and the Caribbean has shown in the last 5 years, 10% CAGR in revenues despite of the global economic scenario. That growth has not happened by chance or coincidence, but has happened by design. And it's all about 2 words: revenue diversification. Let me give it more color to it.
Five years ago, the Latin America and the Caribbean region used to be mainly a receiving region. 75% of the revenues would come from inbound. You can see that, in 2008, the importance already of money transfer and bill payment. This year, in March, bill payment and the outbound and the intra-region volume revenues already represent 58% of the total revenue of the region. And I think this has been the main pillar behind that continuous profitable growth despite of the economic environment.
We still have lots of room to grow. And I'm very happy to tell you that, number one, the retail network we have today, we still have green spaces. We have green spaces in Brazil, we have green spaces in Colombia. We can further drive the retail network and we'll do so. We can continue to diversify our revenue stream in -- with outbound, with intra-region, with payments, but we are adding to that also, now, our focus behind cross-border, C2B, B2C and B2B. So lots of room there to continue to expand and diversify our revenues.
Brazil. I am Brazilian, and I'm very proud to tell you that now, we not only have a bank license, an exchange broker license in Brazil. We have a bank operating, an exchange broker operating in Brazil. And we are ready to continue to diversify our product portfolio and our channel portfolio in that important market. You can expect strong growth coming from Brazil going forward.
Account-based money transfer. I already talked to you that we already 5 countries, only 5 countries and they're going to go to more -- much more than 5 countries going forward.
So in summary, Latin America and the Caribbean has shown 10% CAGR in revenues in the last 5 years, through diversifying its revenue. That revenue diversification are -- not only enabled the growth but also strengthened our strategic position. So our strategic position today is much stronger than it used to be 5 years ago. And that's why I firmly believe that you can expect strong and continuous profitable growth in Latin America and the Caribbean going forward.
Ladies and gentlemen, we will now take a 15-minute break. Please be sure to visit our products and services gallery in the lobby. We will resume in the theater at 11:10 a.m. Thank you.
Ladies and gentlemen, please take your seats. The meeting is about to begin.
Ladies and gentlemen, please welcome President, Western Union Business Solutions, Raj Agrawal.
Rajesh K. Agrawal
Namaste, and good morning, everyone. I'd like to tell you a little bit more about Business Solutions and why we believe this is such a great growth opportunity for Western Union for many years to come.
As we look at the business, it's clear to us that the business has the ability to grow in the low double-digit range for the next several years. And I'll tell you why we believe this. First, long-term trade growth is expected to grow at 2x the rate of GDP for the next several years, and that's an important factor in this business. It's a key driver for us.
Second, you know that we have a very low share of this market, less than 2% share of a $24 billion revenue opportunity, as you heard Hikmet say. So lots of opportunity for us to grow, and we're doing a number of things this year to lay the foundation for long-term growth in share gains, whether it's geographic expansion, product diversification, channel expansion or expansion of the customers that we're targeting. Our goals this year are very much to achieve a revenue of roughly $400 million, and we're starting with a base of 1,900 employees and approximately 95,000 customers.
As we brought the 2 businesses together, clearly, both organizations have a lot of strengths that they brought to the table. In particular, for Western Union, it's pretty much about the balance sheet strength, the global brand and the global licensing and compliance capability. These are going to be key assets for us as we grow globally around the world.
For Travelex, the organization brought a great platforms for financial institutions, law firms, universities, and strong product and functionality capabilities. Now, as we go to customers, our value proposition is much stronger than it ever has been before. And it's showing in our new customer acquisition.
I thought I would just spend a few minutes in comparing and contrasting the 2 organizations, the Money Transfer, the consumer-to-consumer business and the Business Solutions business, just to give you a little bit of background on how the business operates.
The similarities are pretty clear. Cross-border payment services, both organizations focus on that. We also focus on the underserved customer. And we operate under a global brand, which is very important for growth in this business.
The differences stand out even more. The consumer business is primarily a retail-to-retail business. It's expanding into other areas, as you've seen, but it's primarily retail-to-retail. And the B2B business is primarily account-to-account. The principal per transaction is also very different. A few hundred dollars here, and tens of thousands of dollars here, and we also transfer millions of dollars for many customers. Revenue is primarily driven by transaction fee on this side and a little bit of FX, and is primarily FX over here and a little bit of fee, very little fee.
The RPT is a result of those factors. And then the key difference is the sales channel between the 2 organizations. On the consumer side, it's pretty much about customers finding our brand, walking into our stores and doing a transaction with us. Whereas on the B2B side, we're going out and acquiring customers through our direct selling channel, so very different sales propositions.
Here is a snapshot of our customer set, just to give you a little bit of background. In all cases, we spend the time with our customers to understand what their needs are, and we provide them solutions that address their pain points. So for the importer, in the first case here, which is our bread-and-butter customer, this is the primary customer that we have targeted historically, we provide them a solution however they want it. So branch, electronic and different payment options as well. For the exporter, this is a customer set that we have not focused on in the past, but it's a fantastic opportunity for us in this business. If you can just imagine the power of converting every single one of the exporters that we know we touch in the payment process today into a customer of ours, it's going to be very powerful for us to turn these into new customers. And we're focusing on that with new products later this year. And who better than Western Union to connect these importers and exporters together, just like we've done in the consumer side of the house. So we've created send and receive dynamics in the consumer business. We're going to create the same thing in this business by connecting our importers and exporters through a payment hub, and that's absolutely where we're headed.
Lastly, we have many different kinds of corporate customers. This is just one example, Mercer. We're delivering several thousand pension payments for Mercer across the world in 80 countries every single month. Now why does Mercer work with us? They work with us because we can make the payment process for them very simple. We take their information, however they give it to us, and we deliver that payment stream on a regular basis, very effectively and very cost efficiently as well. So they like it because we make it simple for them, simplify the payment process.
This is the other side of our customer set. We work with a lot of vertical and channel partners. These are the 4 key vertical areas that we're focused on. Financial institutions is a global opportunity for us. We already have over 700 financial institution relationships in the B2B business. And as we look at broader Western Union, as you know, we have also lots of banks and post banks as our relationships, so there's a great cross-sell opportunity between the 2 organizations.
Education institutions. We work with the top universities and schools in the world, including Columbia University here in New York City. We collect student payments from international students, and we reconcile those payments and we deliver those back to the universities. And again, it simplifies the payment process for universities and it's a value-added service.
Law firms. They have various payment needs and we have very specific platforms geared towards meeting those needs.
And then charities is a very exciting opportunity for us. We already work with several hundred charities around the world, but we know that there are hundreds of thousands of charities around the world that are our opportunity set, and we're creating some new product sets for these charities later this year that will allow them to come to one place to be able to receive and send payments in any way they want, so in cash, in -- by an account, through an account, through a card and to manage their donor relationships. There's no product that exists like this in the market, but we'll be introducing it later this year and it's going to be very powerful for us.
We have many different kinds of products and services. But if you simplify down to 3 basic product sets, it's these: spot payments, which are simple payments that need to be made right away; forward contracts allow you to manage the risk around a future payment need; and then option contracts allow you to -- give you more options of the time of delivery of the payment. And then we can, of course, deliver the payment however the customer would like to have it.
I thought I would spend a few minutes on our distribution channels, to give you some background. We have 4 basic distribution channels. The first one is the branch model. And that's our primary distribution vehicle. Think about this as offices that are owned by us, with our own people, with various sponsors that are going out and acquiring customers and servicing those customers on a daily basis. That's the primary distribution vehicle we have, and this exists in most of the developed markets that we operate in today and we also like to place these offices in markets where we believe it's a key advantage to be direct in that market.
The next channel we have is the partner channel. I've talked about the 4 vertical areas that we're focused on. These partners take these platforms and they either use them for themselves, for their own payment needs, or for their customer needs. And in many cases, they end up servicing their own needs without interacting with us once they have a platform and they've been on-boarded. So that's the partner channel.
The third channel we have is a simplified web-based platform, so the online platform, where we acquire customers without interaction from a salesperson. These customers find us, they register with us and they start to do transactions with us. So it's a low-touch model in terms of how we acquire customers.
I'll speak about the fourth channel in just a minute.
As we brought the 2 organizations together and we think about growth, we're very focused on these 4 areas, to develop the best products and services for our customers. So geographic expansion, we currently operate in 25 countries around the world, as you heard Hikmet say. And our goal is to be much more global in nature, which we know we can be. We'll focus on the top priority markets first, but then expand as much as we can globally, just like broader Western Union.
Our product development pipeline. I talked about a few of the products. So the product for charities, that's coming later this year. We're also adding retail to our account-to-account business. So account-to-retail -- nobody else in the world can provide the retail payout ability like Western Union. So it's going to be a competitive advantage vis-à-vis any other competitor in the market.
We're also introducing a new FI platform for banks, that will be later this year. And as you've seen, we've announced a business payments wallet, which is functional in the U.S. and Canada today.
From a channel standpoint, I talked about the 3 direct channels: the direct, the online and then the partner channel. And then we have an emerging channel in the agents. The Western Union Agents is a new channel for us, and I believe it's going to be very successful for us over time. It's in the early stages however. We're testing out a few different models and a few different markets. The agents are very excited about it, we're very excited because it's a new distribution channel that we didn't have before and that's going to help us round out how we take this product to market.
And then our target customers. The mass payment opportunities continue to be great opportunities for us because it creates a very sticky relationship with these customers. And we're able to do it really well. And then the exporter category, just to expand to the exporter category of customers, it's going to allow us to increase the number of customers in this business dramatically and we're creating special products, specific products for the exporters later this year.
As we look at growing around the world, we want to grow everywhere, as I said before. So we'll prioritize the top markets first. We're in 25 send countries today. We are able to send payments to anywhere in the world, and we can do it in more than 135 currencies. And we also have our direct clearing network in more than 70 countries around the world. So we can deliver payments locally into our own bank accounts effectively and efficiently for customers. That is what gives us a competitive advantage over other players.
I've highlighted 2 specific areas of particular interest to us: European expansion. You heard Jan Hillered mention earlier today that we have a Western Union bank, which is based in Austria. This gives us licensing capability throughout the entire EU 27 countries. And it gives us the ability to expand in those markets, which we will do today -- this year, and in the next few years.
Asia, India and China continue to top our list as priority markets for us. You heard Mr. Chetan Mehra earlier today speak about the opportunities for the B2B business in India. We'll be testing some things out with him and with others in that market, and with some banks in that market as well. For China, it's very much about currency liberalization. So as we're able to deliver local currency into the Chinese market, we can now capture more of the value chain in that foreign exchange spread that we're missing out on before. It's a very manual effort today because we've got to educate customers, but that's a path that we're headed down.
So as we look at our execution priorities for this year, they have not changed. Our goals are to deliver on our growth objectives, and at the same time, to build the foundation for a long term growth in share gain. So it's geographic expansion, product expansion, customer set expansion to our exporter base and expansion of our channels.
At the same time, we're heavily involved in the integration process today, with the acquisition that we did of the Travelex organization we have last year, and we're setting the business up to get efficiencies out of the combination and to drive long term profitability and growth in this business. So those are our priorities for this year.
I hope that gives you an idea of the B2B business. I'd like to have you watch a short video before I call up my colleagues. So could you please play the video?
Rajesh K. Agrawal
So I hope you enjoyed that video. I'd like to now introduce our Head of our APAC business, Kerry Agiasotis. Kerry?
Thank you, Raj. Well, my name is Kerry Agiasotis, I'm the Regional Managing Director of our Asia Pacific business for the Business Solutions division.
Over the next few minutes, I want to expand upon Raj's presentation to give you an understanding as to how we're organized to continue to expand the customer base that we've already been able to develop that will ensure that we achieve the growth objectives that Raj just spoke about.
Today, we have a fantastic business that's present in 25 countries around the world, serving the international payments and foreign exchange needs of businesses that conduct business internationally. That said, when you look at the chart, in some of the major trading economies around the world, including Germany and Japan, we've only just started out there. And then when you consider other important growth markets, such as India, China, Latin America, Eastern Europe, we've yet to establish a presence there. So whilst we have a fantastic business today, we've got great growth opportunities moving forward into the future.
And because what we do is a value to any organization that conducts business internationally, we have the opportunity to provide services to a broad range of customers in every market that we compete in. And that's really representative of our customer base today. We have customers that span all industries, as well as market segments in terms of size. That said, our primary focus has been in the SME market segment, where we've been able to establish a leading position there. And we've done that through a strong customer-centric business focus that is led by our sales organization, which works closely with these organizations to understand intimately their business activities as it relates to international trade.
By then bringing together our core competencies of strong foreign exchange and international payments expertise, as well as capabilities that we have developed at a highly differentiated mass space [ph], such as our own global payments clearing network, where, today, we can deliver payments to all countries around the world in 135 currencies and directly to 71 of these countries without the involvement of any intermediary, that creates a very strong position for us and a competitive advantage that will allow us to capitalize on these growth opportunities.
So to expand on that, there are 2 other key aspects of our business model that I'll talk about that position us really well to be able to execute around our growth prospects. The first is the way that we're structured. Our organizational design has 2 primary objectives, and that is to ensure that we drive strong alignment in the broad organizational resources that we then bring to customers to service their specific needs.
And the second is to ensure that we consistently deliver this best-in-class service in every market that we operate in, whether that's directly, through a direct presence, or indirectly, through our partners. And key to achieving this is our sales organization. In every market that we compete, we've designed our sales organization with a few objectives in mind, and that is, firstly, to have the right mix of Hunter and Farmer Star resources, which are required to acquire, retain and grow business with our customers, as well as to be able to draw upon the broader resources of our organization, which are required to deliver this best-in-class service. And those resources are typically consolidated in what we call branch hubs. So this provides us a great mix of a local business model that is closely aligned to the target markets that we serve, as well as an efficient business model where we're drawing upon broader resources that are consolidated in different parts of the world. And this is an important enabler for being able to execute against our geographic expansion strategy because it allows us to enter new markets, as well as new geographies in a very rapid way, with a light sales office footprint.
In addition to our organizational design, the other key aspect of our go-to-market model is the way that we align our resources around the key target market segments that we go to market with. So I talked about today, our dominant focus is in the SME market space and we define this as organizations whose annual revenues are between $10 million and $500 million. And as mentioned, here, we've created a best-in-class service that is strongly aligned with the way that these customers do business. And that's our primary aim, to become integrated in the way that they do business internationally. And we've achieved this through a direct sales model. But in addition to that, under Western Union, there are now some new opportunities that we've really gained traction in. The first is in the micro segment, and micro, we define as organizations with annual revenues up to $10 million. And this is a vast market segment that historically has been very difficult to penetrate and reach under the individual assets.
But as you've heard throughout many of the presentations today, one of Western Union's core strengths is the breadth of its agent network. And being able to leverage it, coupled with specific solutions that we have created to serve the more simple and infrequent needs of this customer base, which is a simple, online, self-service model allows us to create a reach and access to our customer base that's unparalleled, and that creates a great market opportunity for us moving forward.
At the other end of the spectrum, we have corporate customers, where, once again, we're managing a very different set of needs. Here, these organizations grapple with having to make tens of thousands of payments to potentially the same number of beneficiaries around the world, managing significant complexity in doing so. And as you can imagine, that creates significant overhead within their operation's departments.
So what we have been able to do is to leverage those core competencies that I talked about a little bit earlier and expand our solutions with a specific functionality that's required to integrate tightly with both their business practices and their ERP systems, such as those that are provided by SAP and Oracle, which takes out much of the inefficiency that I talked about and result in real cost savings for these organizations.
Historically, the way that we address this was very opportunistically, but of late, because of our expanded capability set, we have now dedicated resources in being able to further penetrate this market.
Apart from alignment to horizontal segments, our other key focus is in providing solutions to specific industries through what we call our vertical solutions. These solutions are prepackaged, out-of-the-box offerings for specific industries that tightly meet the needs for those. And today, we have 3 in particular: for financial institutions, educational institutions and law firms.
From a financial institution standpoint, what we've been able to do is deliver a platform that expands the products and services that they provide to their customers. So in effect, it gives them an ability to provide international payments and foreign exchange services to their customer base. And as you can imagine, that's of extreme value to midsized banks, as well as other deposit-taking institutions that have not been able to offer these before.
In addition to being of value to the customer, it's a great value to us because it gives us a captive customer base in which we can sell our products and services rapidly. And the best example of this is what we have done in Japan with a bank called Rakuten Bank. This is an online-only bank, which we established a service with them a little over 12 months ago. And in that time, they have more than 2,000 active SME customers using this platform.
Outside of financial institutions, we provided similar offerings to education and law firms. From an education standpoint, we have over 300 of the world's most renowned universities and colleges using our purpose-built application that simplifies the process for international students making tuition payments. In addition to that, it addresses back-office reconciliation issues that were a burden for many of these education institutions driving cost savings.
And finally, for law firms, the solution that we have provided there allows them to provide enhanced offering to their customers, giving them price certainty related to having to lodge international patents and pay for them at a future point in time.
So with a combination of these products, these purpose-built products and industry experts that we've employed to do this, we're getting significant traction in these. And in addition to these 3, we've got a number in the pipeline. And the way they start off in life is that they're innovative in market through the deep customer knowledge that I talked about a little earlier. So another example of one -- an up-and-coming one, is -- concerns about our pension and payroll payments that our U.K. organization is hard at work producing.
So with that, hopefully, I've given you a sense for how not only we've been able to develop a fantastic business today, but more importantly, how we're organized to capitalize on the important growth opportunities that we have before us. Thank you.
Ladies and gentlemen, please welcome Executive Vice President and Chief Marketing Officer, and President, Western Union Ventures, Diane Scott.
Good morning. It's wonderful to be here today to actually talk with everyone about one of the newest areas within Western Union, Western Union Ventures. And we're really very focused on how we create new growth engines for the company as we continue to move forward.
When you think of Western Union Ventures, I want to think about the one thing and the single thing that we're focused on, which is really about connecting 2 billion consumers with more financial inclusion in the world.
I want you to pay attention to some of the percents up on the screen. These percents represent about 7 different regions across the globe, and these are the percents today that consumers are doing in payments. So of all the payments that are happening into these regions, this is the percent that's happening in cash.
And the reason why that's important for us at Western Union is when you see 4 out of the 7 regions, with over 90% still operating in cash today, it presents a tremendous opportunity for our brand. And at Western Union, we believe we're in a perfect position to connect these 2 billion underserved consumer segments with cash and connect it to the digital world. And that's really the focus that we're on. And we're very much going to do it by leveraging our core assets, and those core assets become the strength and the trust that people have in our global brand and our network, and our deep understanding of not just the customer segments that we serve, but also the compliance to regulatory environments, which are very key to be successful in any of the digital markets when you start expanding to these worlds.
At the heart of everything that we're focused on really does become the customer. And when you look back just a little ways with Western Union, we were a lot more focused on transactions and processing transactions and churning out transactions. And we evolved, and we have a loyalty membership now of 19 million members strong, 50% of revenues flow through that in over 70 markets, continue to make great progress. But we have bigger plans. And we have an opportunity in front of us, we believe, to create a much deeper relationship with our customers and start to extend our revenue life cycle with our customers, and that could come in the form of stored value cards, mobile, digital, and really create that deeper connection in their lives.
And what we're focused on the execution of the Ventures strategies, there's 3 core areas that we're focused on. The first and foremost is our Digital Ventures. And later, my colleague, Khalid, will come up and talk in more depth of the progress we're making in this. But when you hear Digital Ventures, it really is all about channels. And we've built an amazing and successful business in the retail space that Stewart spoke about earlier, and we have an opportunity now to continue to extend our brand and complement our retail channel with our digital and mobile channels.
The second big area of focus is in Stored Value Ventures, and this is really about the store and spend. And we've helped people around the world send and receive money, and we believe we have the opportunity to create a lot more stickiness with those customers by helping them store and spend, whether that's in the form, and we're very agnostic on the form factor. That could be cards, it could be e-wallets, it could be mobile, it could be when we're doing it, or it could be through co-branding with partners.
And the third area is what we call Data Ventures. And Data Ventures is really about capitalizing on what we believe is one of the most pressed assets we have which is our customer base. It's a very underserved segment and it's a customer that's very hard to reach. And so through Data Ventures, our goal is really to start working with different global partners like Allianz, we announced a few days ago, and start creating new attachment revenue stream. So we not only benefit our customers, but we start to create new monetization for Western Union.
I want to spend just a few minutes talking about the digital market and just the pure size of the digital opportunity when it comes to international cross-border on the consumer side. Having most of us in this room have seen, it's an explosive market, it's expected to grow through 2015, upwards of 24% CAGR.
And we, at Western Union, have plans to actually grow our digital space, upwards of 40% to 50%, and I think most of you have seen through our Q1 earnings, we've already hit about close to 40% and so we're off to a good, good trajectory. And a lot of this expansion in the e-channel space with international cross-border remittance sends also is driven by mobile and I think I've read just even the other day that, I think, China now is the top producer of these mobile devices hitting 1.3 billion. And the mobile technology in many of the emerging markets I showed you earlier is going to help a lot more people who have access to digital, so we see a tremendous opportunity for us to continue the ecosystem of Western Union through this channel. And it also presents another great opportunity for us at Western Union, it allows us to actually track new customer segments and new use cases well beyond just remittances.
So when we think of Digital Ventures, our vision and our goal and our belief is really the ability that we can build the largest cross-border digital agent in the world. And we're gaining momentum. If you think back to less than a year ago, we were actually growing only at single-digit. By 2011, we're growing at 35% revenues. We're putting a lot more strategic investment, for the first time, really putting that investment against these digital channels to really accelerate at a more rapid rate, to really grow the market share in the marketplace. And those investments are going into areas such as new technologies, new digital talents, whether they're centered in the heart of San Francisco or out in India, to really help further our development in new products that can be accessed through these new channels. We're also planning a lot more marketing muscling. And you'll start to see more of this at the second half of the year. We're playing a lot more marketing muscle out into the marketplaces that we service because we believe there's a huge opportunity to even increase our acquisition targets even further.
And we're also going to be enhancing our pay-in and pay-out options. And the e-channel space is very critical that beyond just the complement of cash pay-out, that we also have the ability on the account-to-account. So you'll see a lot of movement on that here in the second half the year.
And last but certainly not least is the Western Union mobile area, and we're going to continue to build mobile in a few key areas. One is in the mobile application space. That's usually where we're doing mobile apps in much more the developed markets. So similar to what you've seen here in the U.S., we're going to continue to expand that out. But then also with our mobile operators, we partner with many mobile operators in many developing countries around the globe. And we see this still as a strategic asset. And we're also partnering with less obvious players, which are big technology platform players, like Ericsson, who, we believe, can help us provide even a faster roadmap that enable us to scale quicker with the different M&Os.
Now when we switch gears a little bit and talk about the stored value. It really is an attractive opportunity. By 2015, this market space is actually expected to be well over $600 billion in market size. And outside of the U.S., most of the area of stored value is still very, very nascent, and it's very, very fragmented and a global player has not yet emerged. And we think this is a very rich opportunity for Western Union because it is a complete complement to our business in the customer segments that we serve.
And I want you to think about for just a minute and when we talk about monetizing remittance flows, we actually move -- I think everyone in this room knows this -- but we do move almost $81 billion -- we do move $81 billion worth of principal across the globe. It travels distances, it ends up in many developing markets. And many times, it ends up in the form of cash. And one of the hardest things to do in stored value is to monetize your account and actually get money and get money loaded on the accounts.
So as we can start to think about what we're able to do, with $81 billion flowing now into new forms, whether that is the form of a prepaid card, as Ajay was mentioning earlier, it could form a mobile wallet or e-wallet, it presents tremendous opportunity for Western Union.
And it not only prevents the revenue streams for Western -- I was going to say opportunities for Western Union revenue streams, and the benefit for the customer, but it also starts to provide benefit for our agent base. And our 500,000 agents are very important part of our ecosystem, and we constantly want to find new ways to create new revenue streams for them.
And Ajay also mentioned earlier the ability to really start building this really very large cash reload top-up, as well as top-out network. And when we see stored-value ventures, we really see an opportunity for Western Union to really create the world's largest global reloading cash access network. And you start thinking about 500,000 locations in some of these -- in most -- some of the most cash-entrenched markets on the planet. In order for stored value to really facilitate, you need to build a bridge, the ability to take cash in and cash out of these wallets for these markets to really take off, and we know Western Union's the only brand who really can -- can really do this in any great way with scale.
And we're off to a great start. You've seen a lot of the work that's happening in the United States. But by the end of 2012, we'll be actually in 10 markets, international markets. You heard a few, as my regional colleagues were talking, and Mike Hafer is going to come up and tell you a little bit more about some of the progress we're making in that vein.
And then we've also been spending a lot of time also researching. Because in this particular customer segment, the crossover between people who send money and receive money and pay bills, who also have a propensity and need for stored value, is massive. So we see this as a huge complement to our business and something we expect to scale quite considerably here over the next few years.
And the last area I want to touch on was Data Ventures. And this is a newer area and it's really -- it's about big data in global scale. I mentioned a few minutes ago, this is a market that is very underserved, and it's a very hard group of customers to reach, and whether that's the senders and receivers that we target every day, or it's the, SMEs, when you're talking about exporters and importers in some of these countries, whether it's Malaysia or Thailand. We have an opportunity to create new revenue streams while creating benefit for the customer. And those can come in 2 forms of cross-selling and upselling financial-like products, and that could be insurance, that could come in the form of credit where we're partnering with other brands and co-branding together, or it can be in the nonfinancial areas, the areas of betterment when it comes to education, for example, or travel. And we see a huge potential here. And this is something that we really need to be building up the strategy out further here over the next year. But the reality is when you talk about 2 billion underserved customer segments in the money movement space and just financial inclusion, there are also various underserved in many areas. And we talked to a lot of global partners. We're very lucky and we get to talk with a lot of very fortunate companies and they're all dying to go after the space and they all really see the potential of what our brand is and they see what we have in these markets is something that we can really tap.
So before I turn it over to Khalid and Mike, we're going to walk you through a little bit more depth on what we're doing in the digital and the stored value front. I want to reset what Ventures is about. And Ventures is really about helping Western Union help connect 2 billion underserved customers in cash to a digital world. And we obviously are going to create great economic benefits for Western Union through the development and delivery of these products and services. But at the same time, we quite literally are able to actually help progress an area in the globe that's been very underserved, which is really the area of financial inclusion. And we are going to do all of this by leveraging our core assets and connecting and being really that bridge with the digital, as well as the cash and the retail worlds.
So with that, I'd like to introduce, with great pleasure, Khalid Fellahi, who is our Senior Vice President of Digital Ventures. Thank you.
[Italian] Hi, go Giants. I'm obviously referring to the baseball team. San Francisco's where I'm based now, so I don't understand the game, but I support the team.
Ladies and gentlemen, it's a pleasure to be here and over the next few minutes, my objective is to provide you with some facts with some data points, as well as some examples of initiatives on how Western Union is growing its digital channel.
The tag line, however, that I would like you to remember on each one of the slides is very simple. It's about high growth, and it's about new business for Western Union.
Diane just mentioned it, but the digital channel opportunity is a fast-growing opportunity for us. It's 24% CAGR over the next few years, and I think that as Western Union and my colleagues have really explained it in detail this morning, the regional colleagues, Stewart, we have fantastic assets to really take advantage of to actually be the winners in this game. The 500,000 locations, the unique brand awareness, extraordinary partners, such as Chetan, that you have seen there, local partners.
So we believe that we are uniquely positioned to actually capture a significant part of the opportunity in terms of market share in this business.
Today, just to give you an idea of where we start from. We have a low single-digit market share in the digital channel, but we're actually growing faster than market. And as you have seen, we actually intend to accelerate this growth to 40% or 50% over the next few years.
Let me give you an idea of our road map on how we're going to do that. Today, we have an online presence in virtually all of the markets, but we actually have a transactional sites on only 23 countries. Many of these countries are actually in early ramp-up, but we already play with the portfolio of 5,000 corridors, not 30 or 50, but 5,000 that we can play with.
Today, our revenue in 2011 that we generated was in excess of $100 million. But we -- but the good story is more that we have accelerated the growth to 35% after single-digit growth in previous years. So this story is actually a good story.
Today, we have a solid product that meets primarily the customer needs for credit card to retail payout use cases. But we know that we can actually improve our offer to the customers, as well as the experience, as well as the different products that we can offer to them, as well as the features that we have. We know that we can improve that. So we start from the base that is solid, and it can be much, much better.
Today, we have established the Western Union franchise name as a key partner in new channel opportunities. And in particular, the mobile money or mobile wallet world, especially in emerging economies. And we already have one of the best footprints in the industry when it comes to partnerships with new players such as mobile network operators.
We have done this so far with actually limited investment. Now, for the future, our intent over the next few years is to enable the digital channels globally, providing a rich set of features for cross-border but also for domestic business, for send, receive or spent use cases.
Tomorrow, or in 2015 more specifically, we want to achieve $500 million of business at the minimum, as Hikmet has mentioned this morning. That's something, which we would achieve by acquiring more customers, but also by increasing the share of wallet we get by providing more ways to do what they want to do, as well as their loyalty, and we're already seeing that.
Tomorrow -- or now actually, we are migrating to a brand new technology platform that will be a step change in terms of customer experience for the customers that visit us.
We're also advancing our agenda to be a global hub, connecting all kinds of funding and disbursement methods, like Stewart was saying this morning. It's about cash, it's about accounts, but it's also about the emerging ones like the mobile wallets. It's about cards, like Ajay Banga was saying this morning. So we are the hub that will be connecting all of these methods.
Now to achieve our goals, we are investing not only in technology or marketing, as Diane just mentioned, but also investing in key talent. And this is one of the reasons we moved our headquarters for more digital in San Francisco, actually just next to the AT&T Park, which is home to the San Francisco Giants.
And what our intent is to nurture a culture of innovation and speed that are absolutely critical in the digital space. And we feel that the ecosystem of the Bay Area is actually something, which is going to enable that.
So it's all about growth, as you can see. And one data point, which is important, if we look at our customers that are transacting with -- for the past 12 months in the WU.com business, 80% are brand-new to the franchise. They're brand-new to Western Union. So it's all about adding on the top line of Western Union.
Now let me go through some of the initiatives or the things that we're doing over the next few months. The WU-Wallet foundation. We are actually in the process of migrating our product platform for online, the web, as well as the mobile platforms to a state-of-the-art e-wallet technology. This will help us have a more customer-centric experience and significant product evolution opportunities, not only in the money transfer business but also in the spend business. We are connecting the dots, and Mike Hafer, my colleague, will tell you a little bit more about that, but we're connecting all of the dots.
Amongst the driver for new business, we are planning to deploy our WU Pay business, which we announced a few weeks ago, internationally. WU Pay provides an alternative payment method for e-commerce, allowing customers to use either their bank accounts or actually cash at locations, which is again an example of how we are connecting the dots. We believe that with WU Pay and the WU-Wallet, this is a very powerful combination that gives us some opportunity for future new customers and new types of business.
And then we're also working on the basics obviously, we're expanding our transaction funding options to more popular and cost-effective options. Today, we are largely a cards-based service. We're looking at brand-new business by expanding through ACH, direct debit account and other methods depending on the geographies and countries to attract more customers and provide more choices.
On the few other points, like mobile, account-to-account, et cetera, I will be giving a little bit more color in the next few slides.
So let's start with mobile. Actually, mobile is at the center of everything we do today. We start thinking mobile even when we design our products for our business. We launched our first app, and it was the first in the industry or amongst the first in the industry, in May 2011, about a year ago, on the main 3 -- systems are available for smartphones. It's in essence a continuation of our online business, but in the palm of your hand.
We targeted -- sorry, we've actually also decided to offer something that was beyond what we do traditionally and the rich set of features such as PIN Debit cards, it's basically like if you had an ATM on your phone. You can use your card like a PIN debit. Or other options such as cash at location, again, connecting the dots. We know that some of our customers would prefer to go and pay cash for a transaction.
In just a few months, 10% of our volume of online in the U.S. has actually -- is now coming from mobile. And what we see is that these customers actually are more loyal, and we have a better share of wallet from them.
So again, we want to -- we will be expanding actually this business over the next few months in other geographies, and it's really about bringing new things and new business.
Account-to-account. It's arguably the largest opportunity probably in the remittance or the Money Transfer business. And beyond the successful ABMT, or account-based money transfer businesses that we already have, that Stewart and my colleagues from the regions have already mentioned, we felt that we wanted to actually have a more, let's say, scalable product that would be able to disperse funds into accounts in any one country in all the banks in one time.
We've actually started this business, and we've launched our first product or our first offer in the U.S. in December 2011 with a possibility to pay out in 38 countries. We've since then expanded into the U.K. and Australia, and we intend to obviously continue expanding on both sides, offers in certain countries and payout in other countries.
Again, it's brand-new business. 90% of the customers or the new case -- the use cases we are seeing are brand-new to the franchise. It's all about new business, it's all about new things we are adding on the top line.
WU Pay, as I mentioned earlier, this is an intrinsic payment method for e-commerce that is based on the recent acquisition of eBillme, which we did in October 2011. The value proposition is what we call e-cash or cash for e-commerce. It's that customers can safely pay from their bank account by transferring funds, pushing funds to us and then to the merchant, simply by going to their online banking platform. They can also pay at the location. Again we're connecting all of the dots. And actually this allows the e-tailers, as well as us, as a use case, by the way, to acquire customers that do not like to share their financial details online or customers that have been declined for one reason or another. It's about saving customers. So we're bringing new business, not only to Western Union but also to the e-tailers by providing this kind of business. It's broadly based relevant for domestic, but also for cross-border business.
And also with this acquisition, we had a couple of nice little assets that came with it, and in particular, a gift card mall, a virtual gift card mall, pretty rich. And also a portfolio of very good merchants. And if you combine the WU Pay with the WU-Wallet, again, you can see that we have some very good business opportunity in the future.
Finally, I'd like to talk about the mobile transaction services, which happened in my backyard a few years ago when I was running our African business. We continue to position strategically our business for emerging opportunities like mobile wallets. According to GSMA, there are approximately 120 initiatives out there, primarily in the emerging countries around mobile money and mobile wallets. We've already partnered with 30 of the large MNOs that are actually doing this kind of initiatives.
Western Union has an established presence, and we are the name in the industry when it comes to money transfer. And we've also partnered with several leading technical platforms. One is the example that Diane gave this morning as well as Hikmet about Ericsson, to actually enable more ease in the ecosystem.
We believe this is a strategic area and it allows us to be the hub or a hub in the industry. But we also see that this is still a nascent business, and we think it's a 3- to 5-year opportunity, but we strongly believe that we have to be there, and we are there big time.
Finally, and in conclusion, I will leave you with just a few points, if it works. Okay, so in conclusion, the opportunity is big. It's growing at a healthy pace. We have low market share, but we already have a business in excess of $100 million. We're growing at 35%, up from single digits. We're investing and launching new products that will help us acquire new customers and new business. We're very well set to achieve the $500 million by 2015.
I would like now to introduce my friend and colleague, who could probably with his good looks and flashy smile, go for senator elections or presidential. He chose instead to serve the 2 billion customers by running our Stored Value business. Welcome, Mike Hafer.
Thank you, sir. That was quite the introduction. Thank you, Khalid.
Good morning, everyone. I'm really excited and it has -- my pure pleasure to talk about our Stored Value business. I am going to talk a few minutes about what we've been doing, what our go-to-market strategies are to create the world's largest provider for stored value and prepaid around the globe.
Before I do, however, I do want to talk a little bit about how we are trying to create deeper customer relationships with our customers. We already serve millions and millions of consumers with a flawless consumer money transfer and bill payment business around the world today. However, how can we build a deeper customer relationship by evolving a very successful loyalty program that's been in the market for 10 years now and creating this deeper level of customer relationship? When you think about it, if you can put something like this in someone's hands and they use this on an ongoing daily basis, it now creates a relevant conversation with this consumer and makes the Western Union brand front and center with these consumers on a daily basis. They are using these tools for financial inclusion, financial dignity, improved access, being able to shop online, being able to do things they've never been able to do before, all from Western Union.
As you all know, we've actually started our prepaid and stored value in the U.S. However, I'd like to start with a different market before we start talking about our efforts in the U.S.
As you heard Drina talked about earlier, one of our most important inbound receive markets around the world is the Philippines, a fantastic market for us today.
We actually -- before we go out, we build any kind of products like these, we actually go out, we speak to the consumers. We ask them, "What are their needs? What are they missing today? How can we improve their day-to-day lives?" And what do they tell us? They tell us they're looking for convenience. They're looking for improved access. They're looking for simplicity. They're looking for security. And most importantly, they're looking for something that Western Union can help them with on a daily basis.
And as a result, we are literally on the steps of being able to launch a new inbound reloadable, stored-value account in the Philippines, utilizing our agent partners in that country that allows consumers to receive remittances into that market in a variety of ways.
They can receive them directly on a prepaid card, by either making a phone call or going online. They can go into our agent locations and pick up money. They can actually split the money transfer into 2. They can put part of the money transfer onto the card, and they can take part of the money transfer in cash.
These are fantastic new ways to serve our consumers. What does it do? One, it helps improve our share of wallet. Think about it, if a consumer has one of these cards in their wallet, and they're going to tell their sender to send them more money because they need help with rent or they need help with something in their daily lives, who do you think they're going to tell to use? They're going to tell their senders to use Western Union.
It also improves obviously the relationship that we have with the consumer by using those consumers and having them use our services on a daily basis. Most importantly, and Diane spoke about it a minute ago, it's utilizing the remittance flows as the important fuel to help make these programs have instant utility and instant usage with our consumers.
Let me shift gears now to our United States efforts. Same thing. Before we put any kind of products in the market, what do we do? We want to speak to our consumers. The voice of the customer is very important to us. And we ask them, "What are they missing today? What do they see in the market that they don't really love? What can we do better for them?" And what do they tell us? They said they're looking for a money management tool. They said they're looking for something that will improve access for them, improve security for them.
And most importantly, they said they were looking for a tool that provide a very strong value proposition to them. They said they didn't like hidden fees. And what did we do? We put a couple of programs in the market, our MoneyWise card and our Prepaid Gold card that provides some of the strongest value in the market.
In fact as you see it up on this slide right now, we actually did a survey in late 2011, when we actually went out and found hundreds and hundreds of consumers that use these types of products in the marketplace. Not only our products, but also the products of some of our main competitors. And we asked these consumers what they thought about these products. And as you can see as evidence on this chart, the satisfaction ratings for the Western Union reloadable prepaid cards were dramatically higher than any of our primary competitors.
One of the main reasons for that was the fact that they said we provided phenomenal value. No hidden fees, no ongoing monthly fees. In fact, you can actually get one of our cards today, sign up for direct deposit as one of your primary load methods, and use our cards year-round without paying us $0.10 in fees. That's a phenomenal value for consumers.
In fact, just recently, our Prepaid Gold card won a very prestigious industry award in Las Vegas at the annual Prepaid Expo in March. This program received the best consumer value in prepaid, beating out many of our main competitors. And our MoneyWise card also won the Best General Purpose Reloadable Prepaid Card in the United States, again beating out many of our main competitors.
We are very proud of the fact that these 2 cards is the culmination of the efforts that we've had in the last 1.5 years in the market that have allowed us to earn the respect from our industry peers, but also from our consumers.
What else have they told us? They said they want these tools to be able to send money and pay bills. Who does that any better than us? So now what we are in the midst of doing is building the ability for our consumers to use these products to be able to send money transfers, receive money transfers and pay bills right from the card, both from our agent locations, as well as in other online and other channels.
How do we accelerate our efforts to build stored value to become the global leader in this space? We have a dual strategy. First, Western Union is entering markets as the primary player in that market and launching programs on our own where we are the program manager. We already have done that in the U.S. We have actually already done it in Europe as well, in the U.K., Germany and Austria. You heard Jan talk about that briefly.
And I'm excited to say that we are very close to launching another reloadable program in the country of India. You heard Drina talk about the importance of India, and Chetan as well. We believe we can provide financial inclusion or financial dignity to the consumers in India that utilize our services. And again, use those inbound remittance flows as the fuel that provides instant utility and instant value for our consumers.
However, there are ways we can actually accelerate our growth even faster by leveraging our fantastic agent partnerships that we have. I have a couple of examples up on this slide. Air Pack, our fantastic partner in Central America. They help run money transfer for us in 5 countries in Central America. We've partnered with them and with MasterCard to launch an inbound reloadable remittance program that allows consumers to receive remittances directly into these accounts.
We're also partnering with our fantastic agent partner, you actually saw their CEO on the video earlier in Jamaica with GraceKennedy, same type of idea, utilizing the massive inflows coming into that country to provide instant utility and instant value to consumers that want to use a stored-value program that provides both form factors in Jamaica of a card and mobile.
One of the other things you've heard quite a few times. You've heard it from Hikmet. You've heard it from Ajay. You've heard it from Diane. You've heard it from others. We have to build the world's largest global reloading cash access network. Why? A, because we are the ones that can do it; and B, it's an important asset for any program or any consumer that's using these types of solutions, whether it be a prepaid card, an mWallet, an e-wallet, et cetera. So what we are now doing, we are literally in the midst of doing this, is we are taking our very successful reload network that we have in the U.S. and in Argentina, and we are now starting to expand it around the globe. We've actually started this expansion, and we will be live in at least 10 countries by the end of this year, providing consumers the ability to go into Western Union agent locations and to able to top up their account and in select markets where point-of-sale spend and ATM access is not as easily available to be able to get cash off of their accounts as well.
We're also working with our partners at MasterCard, and their rePower team to help us accelerate this growth once we can launch these new markets later in 2012.
The funds-in and funds-out model provides instant utility, instant usage, and of course, ubiquitous convenience to consumers that are utilizing these services. You may or may not know, our reload networks today in both the U.S. and Argentina already serve 140 clients and programs successfully in these 2 markets, and we are very excited about expanding these services around the world.
Most importantly and to build on Diane's earlier point, providing new transaction services, new transaction types that will drive more foot traffic for our agents and more revenue potential for our agents is, of course, something we're always doing, and this is going to do that for them.
So we're on an upward trajectory. Just 2 years ago, we were only live in 2 countries. Today, we are live in 5. By the end of the year, we'll be live in at least 10. And our plan by 2015 is we will have stored-value products and services available in 40 of the most important countries around the world. It's a global expansion effort. It allows us to drive new customers and provide, most importantly, a deeper level of customer relationship so that customers are utilizing our solutions on a daily basis and reminding consumers the value the Western Union brand brings to them.
Thank you for the time this morning. I would like to now invite Diane back up to on the stage.
Well I don't know about anyone else, but I am not going to be able to look at Mike Hafer every day and not see him as a politician, so it was very hard for me to watch him do that presentation.
We thought we'd round out today talking just a few minutes and give you guys a brief touch and update on where we're at with the brand. Obviously, everything you've heard over the morning is really a foundational asset to it is our Western Union brand.
And I know Scott Scheirman shared a lot of numbers, and I know each and every one of you have memorized it at this point. But I'm inviting you to actually remember 5 more.
The first one is global brand awareness. Western Union has 82% global brand awareness and it truly is a brand that's recognized everywhere in the world.
Eight out of 10. This is the trust our customers have in Western Union, and I can guarantee that not all financial services players in today's day and age can see those kind of trust levels with their customers today.
500,000 agent locations. I know you're tired of hearing us say 500,000 locations. But this matters because it's not just about where we connect with our customers. But when you start to think about this from a branding perspective and the visual identity system this builds for us, it's a tremendous opportunity for us across the globe.
28 million. Raj mentioned earlier, there's 28 million small- and medium-sized enterprises around the globe who have today cross-border payment needs. We believe our brand has a tremendous ability to stretch well beyond where we've been with the customer in the consumer side of the house and really extend a much deeper rate into the business-to-business world.
And last but not least, and I know you've heard it a lot, again, the 2 billion underserved consumers. And the reason why we have it up hear from a brand perspective is I think it starts to begin to show you the brand relevance that Western Union has with the bulk of a very large population out there in the marketplace that we can tap. And I think it also and that will lead -- begins to show that Western Union is anything but a niche player when it comes to branding in global terms.
We believe the Western Union brand is also uniquely positioned on the global stage. And yes, of course, at our core, what we do is we move money. And I think Chetan said it best, when he actually stated we do more than move money. We actually help people actually move their lives forward.
And with Western Union, we believe we're really in a place and we're able to actually move customers up from the bottom of the pyramid. And I want to just maybe step away just for a minute from Western Union and just share some interesting statistics.
Since 2005, the amount of the percent of people at the bottom of the pyramid has actually shrunk by 15%. The next 4 years, it's projected to shrink actually another 8%. And when you start thinking about that opportunity for Western Union and people moving up the pyramid and into that more unbanked and underserved, it really presents a tremendous massive opportunity for Western Union.
So I can pretty much guarantee at any other Investor Day, as you've never seen a Fortune 500 company show a picture of their brand in the desert. And it's important because my regional colleagues shared earlier that we're not only in 200 countries, but we're actually in many places in all these countries, truly a global mainstream brand.
And on the next few slides, I just want to share a glimpse because I would love to take everybody in this room and take us on a tour so you can really feel the heartbeat of the Western Union brand on the streets of many of the markets that we serve.
But it's there. And it's a very local brand. And we all take for granted because we have these devices in our pockets, these smartphones and we have them, we take them everywhere we go. But even despite of all the growth, which we'll continue to see with smartphones, which has been at a trajectory that no one could have ever predicted, even in emerging markets, it's still only a 20% penetration. And my point is, Western Union as a physical brand is already in these places. We have a strong foundation, and we'll continue to build from that in the digital space as well.
And there's a lot of brands out there today, retail brands. And they are sitting and figuring out, which markets are going to go into next or at their 50th market, they're looking to go into their -- what's their next 10 markets that they're going to go. We're actually still already today in 200 markets, so we have that global foundation.
And there's a lot of digital brands. And they're beginning to go to many of these markets. And as you can see, these are the real pictures of our brand on many parts of the planet. We're already highly trusted -- we are already a household name. And as digital brands begin to go, Western Union has something that's going to help us accelerate at a pretty fast rate relative to others, which is we already have a presence. We already are a household name. And again, in many emerging markets, it's still Internet penetration in some of these markets is still at 13%, 26%, 39%. There's still room to grow for those brands to become a household name, but we already have that foundational footprint.
But as we saw, as we've been building the brand and what you've seen over the last few hours, we're moving the brand into new places. And we felt that we really had to come through and think about what is our brand platform as we go forward. And we launched midyear last year a new brand platform called Moving Money For Better. And Moving Money For Better really is an expression of the pivotal role that Western Union plays in the lives of our consumers, in the lives of businesses and probably even more importantly, about the pivotal role that our consumer is playing in the lives of their loved ones.
And it's really only been out in the market about 6 months, and we're talking about rolling out 200 countries, 500,000 locations later. So not an easy task, but we're continuing to make progress. And really have been able to tap some great impression levels for our brand and really going after some new media forms that Western Union hasn't really been as involved in, in the past. And it's helping us really raise the profile and start to attract new customer segments that we haven't seen with a franchise before.
We're also building very heavily on what we really call our moments of truth. And these really are our channels. One of the biggest brand-building assets we have are our channels. And you heard from Stewart earlier and hopefully you had a chance to touch and feel a little bit about some of the ways we're really trying to push the retail space to a next level for Western Union.
Khalid mentioned as well in digital. He was talking a lot more about the e-commerce and the revenue side of it, but the digital platform really is also our face and it's our window to Western Union. And by the end of 2012, I think you'll see quite a dramatic facelift from where we've been at today and how we're continuing to build the brand.
And the same with mobile, continue to find ways to provide new access, new experiences with these touch points would you not underestimate and the power of what they can actually do to help deliver for our brand as we go forward.
And we're not stopping there, because we think there's opportunity to stretch the brand further, and you may have seen hints of it through Khalid's presentation, as well as I believe Hikmet had it in his as well. But we're beginning to refine our brand architecture a little bit. We're simplifying a lot of our naming schemes. We're taking the brand to a next level and we're actually evolving our brand visually in some of our newer products and channels. And you'll start to see the introduction of the W-U or the WU symbol, and this is something that we've been testing with customers around the globe and getting good traction and reaction, which is fantastic. And you're starting to see that come out with things like WU Mobile. You're seeing it come out with WU Pay, and we'll continue to evolve the brands or continue to contemporize as we go.
And yes, Western Union still is the brand that has 82% global awareness. But we are changing and we're beginning to start to change the face of Western Union as move in a lot of these new spaces.
And the reality is the world of branding is changing, the world of engagement is changing and our customers are changing, and they are on the move, and Western Union is today absolutely on the move with our customers and moving with them, and hopefully all 2 billion of them. So thank you. I appreciate the time.
And I'd like to introduce and bring back Mike Salop up for the Q&A.
Michael A. Salop
Okay. I'm going to open it up for question and answer now, and I ask Diane actually to come back on stage along with Hikmet, Raj, Stewart and Scott. While they're coming up, I just want to make one comment. We've gotten a lot of questions about the disclosure we had in our 10-Q regarding the government investigation into one of our former agents in California and also the fact that we were named in a letter as a target of that investigation that relates to that agent. So I just want to read a statement on that before we get started, and since this is legal, I am going to read it so to make sure you get it verbatim.
We have been cooperating with the government in connection with this particular case for almost 2 years and assisted the government prior to the time the former agent was arrested, just as we have cooperated on a daily basis with law enforcement departments throughout the U.S.
We believe the company has robust compliance in any money laundering policies and processes in place and we look forward to demonstrating that fact to the U.S. Attorney's Office in Los Angeles.
We are not aware of any evidence to suggest the company or any of its employees knowingly engaged in any conduct with this former agent that would constitute a violation of the law.
As we have no further information about the government's investigation, there's nothing more we can add at this time, so we'll not be able to take questions on the matter today.
Michael A. Salop
Okay, so we have 3 microphones on the audience, so everyone just wants raise your hand and we'll try to get everybody as quickly as we can. So we'll start with David.
David Togut - Evercore Partners Inc., Research Division
David Togut with Evercore Partners. Scott, a question for you on margins. You indicated you were focused on expanding margins. For 2013, if the global macro-environment doesn't improve, do you intend to show material margin expansion?
Scott T. Scheirman
David, what I've described with margin expansion, one of the key factors, one of the primary factors will be accelerating revenue growth at accelerated pace, if you will, so that will be very important to our business model, along with optimizing our operating structure. Now the economy is always hard to predict, whether that's heading in '13 or '14, but we're very focused with the business leaders to drive accelerated revenue growth as we move forward.
David Togut - Evercore Partners Inc., Research Division
And a question for Stewart Stockdale. On Page 5 of your presentation, you put up an agent value presentation with 4 quadrants. If you break down your total agents by percentage, what percentage of agents would go into each of the 4 quadrants? And what's the direction of agent payouts in each of those 4 quadrants?
Stewart A. Stockdale
Well, obviously, you bring up a good point in that agent optimization is one of our key targets to lower down the optimization. What we've done is, we actually went through a pretty intense process where we brought in 15 people from around the world to really operationalize that concept. We've always worked on negotiating, but what we've now done on a market-by-market basis, is look at which of our agents that are must-win, which of the agents that we can really negotiate. I can't tell you what percentage is on each one of those quadrants and on every market. You can imagine it goes across every market, every geography and sometimes even regionally within markets. But what is very important is that, that concept is something that's all of our salespeople now have in their back pocket. We've now -- most of our people now even have automated iPads that they're working with, so everybody knows what position to go in and start negotiate against. And it's as much art as it science, okay? Because when you go to negotiating, you're really dealing as really the moment of truth. But what's really important is that people know this is an agent that I may be willing to lose, and this is an agent that I must win. So part of it is being operationalized as we speak, and we expect it to pay dividends short term and long term as well.
Michael A. Salop
Kartik Mehta - Northcoast Research
You've talked a lot about agents in the 500,000 number. And I was wondering does the 80-20 rule apply here? Are 20% of your agents generating 80% of revenue or something close to that? And so is there an opportunity there to mature the other ones, of course, they're really concentrated?
Kartik, as you know our business is basically corridor-based. It doesn't apply that 20%, 80-20 does apply in major markets. However, if you don't have any location in the rural areas of India, you can't send money from L.A. to India or from U.E. to India on the rural areas of Bihar. So it's very, very important that we have the receive site to drive also the send site. We have this concept within Stewart's organization, we don't want to say no to our customers, you can't save money. We would like to say it to every customer, you can send at any points of the world money. That's way we have this 1 million regional touch points. Is it the location? Is it the ATMs? Is it the convenience stores? I think being in everywhere drives really the revenue, and that has been the formula. It's a simple formula. You build it, they really come and drives the brand awareness, drives the transaction, drives the revenue.
Kartik Mehta - Northcoast Research
And just one last, Raj, for you. On the Business Solutions side, you said you have very little market share. I think you said 2%. Over the next 3 to 5 years, where do you anticipate that market share will go to?
Rajesh K. Agrawal
I was watching you, Raj.
Rajesh K. Agrawal
There's a lot of opportunity. And it's not only about expanding into new geographies, but it's also about gaining more market share in the markets we're already in. The U.S., for example, also, we're less than 2% market share. So there's a tremendous opportunity to continue to grow in the existing markets, while also expanding into new markets. And the market share, I can't predict exactly what it's going to be, but we want to be at a higher level of market share in the next few years.
Kartik, just to add on that, I mean obviously 2% market share is really a good opportunity to grow it, right? And we're not satisfied. It really reminds me on the business as I started in Western Union 13 years ago, which we had 5% or so. 10 years ago, we had 7% remittance market share. And then about I don't -- 13 years ago, 5%; now we are up to 17%. I think it reminds me also of the opportunity of the SME Money Transfer business. We are committed to grow this revenue-wise, grow this lower double digit for the coming years on the B2B business. I'm very passionate about that. And I think the team headquartered in London and globally everyone you saw also from -- today from Raj and Kerry presentations, we have the salespeople and we are very committed. And our agents and our regional heads are supporting that, to grow this 2% market share.
Michael A. Salop
Yes. I think on the side over there.
Bryan Keane - Deutsche Bank AG, Research Division
It's Bryan Keane of Deutsche Bank. I guess, Scott, you mentioned that there's some extra compliance costs from Dodd-Frank. I guess one is that in guidance already? And then two, can you quantify that impact in 2012 and then in the ongoing?
Scott T. Scheirman
Yes. Bryan, what I'll share with you is we're still working through that right now. We've got a working team going through how do we operationalize that. We did not, if you will, contemplate that in our original guidance. As we get to the second quarter earnings release, we'll share more on that. But what it's become is a tad bit more complex. Now we've got roughly 60,000 locations that we need to operationalize by February, which is a short, short amount of time. So we'll share more as we get to the second quarter earnings release.
Bryan Keane - Deutsche Bank AG, Research Division
Is it going to be material size? Or is it hard to even quantify that?
Scott T. Scheirman
Well, we're working through it. Because what we want to bifurcate is how much of it is onetime and incremental, how much will we just fund it as part of the ongoing operations. One example I would give you, in certain locations we have to put up some new point-of-sale that might just have one language. We have an existing marketing budget where we might be replacing point-of-sale anyway. So it's really going through that analysis to say how much is incremental and then how much is part of the ongoing cost.
Bryan Keane - Deutsche Bank AG, Research Division
Okay, and then just one last question for Hikmet. When you look at the market share gains, obviously in 2001 you're at 7% to 2006, you jumped to 15%, almost doubled. Last 5 years, you're only up 2 points, even though you've almost doubled your locations from 300,000 to 500,000. So that suggests you're not getting the same return on your locations. I guess, what's preventing you guys from gaining share like you were in the past? And can you move that number materially into the mid-20s or somewhere like that?
I think I still believe on the formula. And I think we're going to expand the network locations. We're going to gain market share. What happened in 2008 and beyond was definitely the economical challenges, which impact generally the market and companies like us. We had an impact on that. However, I believe that expansion on the network expansion doesn't give us only the expansion of the remittance market but also expansion on new customer segments, which we didn't touch in the past. I'll give you an example. Today, Victoria presented this domestic Money Transfer business very well. As we repositioned our domestic Money Transfer business, which were 145 years already in this country, and we put $5 for $50, our fastest-growing part of the domestic Money Transfer business was the city-to-city, New York City to New York City transactions. The reason for that is we are already in every corner, we have almost 60,000 locations in the U.S. It's easier to go in Queens to send from next location's money and pick up in Manhattan or in Bronx the money. It's faster, it's cheaper, it's easier. I think that expansion will grow because we are touching new customer segments. We are entering into the new consumers, and I believe also it's not only gaining. The existing market, the remittance market is also opening new revenues.
Michael A. Salop
Darrin D. Peller - Barclays Capital, Research Division
In the presentation that you mentioned earlier how the investments in the new channels, really, .com, you're spending $35 million now, it's really kind of the first time we've really seen a real emphasis on the .com in terms of financial commitment, yet it's already growing over 30% even without that commitment having really been made until recently. So it should show even more material growth going forward. Question really is the new customer base you have come into that channel, is it existing customers? Is it new? I know I think I've heard some data points around that, but I'd love to hear more about that now. And what is it for you to change the model over time from that shift in model from more of this sort of brick and mortar or physical to online?
Diane, you want to take that?
Yes, I'll take that. What we're seeing is 80%, the customers coming to westernunion.com are actually completely new to Western Union. So really it's attracting a new customer, and we're also seeing new use cases. So if you think about it, today, we only have the account-to-cash, and as Khalid shared, we're also now adding the account-to-account structures. When you start adding the account-to-account, that's going to open up a whole new playing field that's going to help us accelerate that growth even faster, with new customers against new segments, and that's really where we focus and target.
Darrin D. Peller - Barclays Capital, Research Division
Just to follow up. The economic model, maybe just either Scott or Hikmet, the economic model on those transactions, are they very similar or very different than your current infrastructure?
Well, they are pretty similar. I mean the pricing structure is similar, right? The customers really pay for the convenience, for the brand awareness, for security, for reliability, and they are -- nobody can match that to serve 200 countries, right? You sit in your home and send money from New York to 200 countries, in Nepal, Kathmandu in minutes, match that with their local currency. So we are really -- the pricing model and the service to the customer is the same. It is also convenient for us also quite when the growth comes quite good for us because we are our own agent on the send sides. On the receive site, we still dictate the agent side that we do, pay the agents the commissions. But on the send side, we are our own agent, and that helps also the transactions. And by the way, it's really the new customers, 80% of the consumers are new to the franchise ever.
Michael A. Salop
Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division
Just a couple of questions. Obviously, a lot of cool growth opportunities here. I'm just curious how you balance investing in these growth areas versus your desire to lever on the margin expansion and also not underinvest in the core. Just trying to understand how we should consider the longer-term margin trajectory here?
Scott T. Scheirman
Tien-Tsin, what I'd share with you, we have a focus on, if you will, is that as we accelerate revenue growth. We believe we have opportunities to accelerate revenue growth in really each of the key areas that we outlined today. And we believe the combination of that accelerated revenue growth provides us, I'll say, the investment dollars to continue that top line and that market share growing. But at the same time, we can leverage the margins, drive margin expansion by leveraging those fixed costs. So clearly, a primary part of our model is getting that revenue growth to go north at an accelerated pace. And you heard from Stewart, Raj, Diane, all the regional leaders are focused on how do we move at a quicker pace. And with that, we can invest and we can drive margin expansion. So we feel like we've got the business model to do that on a go-forward basis.
Tien-Tsin, on the -- adding on that. Just the $35 million taken as an example. We really believe that's a huge opportunity. We put it under Ventures, it's basically put -- helping our core business to grow Money Transfer business with the digital channel. We call it our new region. We call it Digital 6 region, digital region. And we protect this and invest heavily because we want to achieve that -- the $500 million in 2015. With the time, when that growth will -- business as usual, of course, the growth rate will help our margin expansion.
Tien-Tsin T. Huang - JP Morgan Chase & Co, Research Division
Got it. And just on the digital side, a separate question. I mean, it makes sense to tie to these -- all these digital accounts that are emerging across the globe and a lot of cash out there, and that's your distribution points. So I'm just trying to understand given your focus on the brand and also the emergence of so many digital accounts, whether it be Apple or Facebook or even the PayPal, are these friends or foes? Can you work with these providers? I mean do you consider them potential partners? I'm just curious how you can extend into these big content providers. Or is it really going after individually? Do you follow my question?
I do, yes. And if I have the -- part of a blessing and a curse of the payment space is we're all coopetition, right? MasterCard is a great friend, but we also compete with them on other fronts. Same holds true with all the different ones. And I think the key to remember is if you think about how the brand was built, all of those 500,000 locations, the majority of them have been built on a partnership, right, with another great brand and another great market. And when we look at the digital space, we don't sort of end there, we see the world as partnerships being in a coopetition place, absolutely as we go further as well. And we call more virtual agents and how we partner with them as we go forward.
Maybe the big differentiation is we, as a company, identified our customer segment, we call them underserved. The others, what you named, didn't call the underserved customer as a target segment. I think we have our place there, and recall I had questions about one, a few years ago, at the Investor Day. Is MasterCard your enemy or your friend? You saw that we have our own spaces, and it does match together to combine in some partnerships.
Michael A. Salop
Ashwin Shirvaikar - Citigroup Inc, Research Division
It's Ashwin Shirvaikar from Citi. I wanted to ask about the ABMT opportunity. In the last year, and I think in 2011, you doubled the number of banks and provided some data that the number of transactions is growing 45%. What's your focus there? And are there more banks to come? I mean, are these banks like normal agents in terms of the economic model?
Scott T. Scheirman
Yes, it's -- you're right, we're growing 45% that business. It's a complement to what we're -- the discussions that we're having, which is the electronic and retail. Most of that business today is account-to-cash. We'll build a component that's account-to-account as well, just like we're doing on the WU.com. So if you start thinking of cash-to-cash and account-to-cash, or cash-to-account and then account-to-account, we want to play in those different spectrums. Obviously the banks represent a phenomenal opportunity for us. They've been our partners for years on the retail side, so then the cash, what we call historic cash-to-cash, and what we found is that there's a really big reception for the banks to play even on their electronic side, which means that we have to go into their core systems and link directly to those current accounts and send from there. The last few years, we've signed up a number of -- and it's in the tens, and obviously what we want to do is expand that. We've had great success with U.S. Bank, Regents Bank, Scotiabank, a number of the European banks that Jan spoke about, which is also now triggering the rest of the banks' interest to join into the fray. So we like the 45%. We think that will continue to come in. And the key is now going into those banks and what we call the activation part. We've got a lot of interest in signing them up, and the activation is a little different because we really then have to go into their core systems and integrate across the board. But yes, there is a lot of interest. We foresee that growth rate to continue to be in that range that I just described, and you'll continue to hear big banks come into the fold to do both retail. And all of those retail locations are branding Western Union the same way as their account transaction. So it's a great win-win.
Ashwin Shirvaikar - Citigroup Inc, Research Division
Okay. The second question I have is on the Business Solutions side. Can you talk about some of the specifics of what you're doing? I don't think it was mentioned in the presentation with regards to integrating Travelex and Custom House? Where do you stand in that process?
Rajesh K. Agrawal
Sure. We're about -- we're in the middle of that process right now. The integration had always been about consolidating systems and back-end operations and maybe even using some of the Western Union operational centers around the world and putting functions there, facility consolidation. It's also about integrating the front-end approach to the market because both businesses are a little bit different and operate slightly differently, and so it's about integrating all those functions together, while at the same time, getting efficiencies out of it. And we see that integration process continuing on into early 2013.
Ashwin Shirvaikar - Citigroup Inc, Research Division
So you are basically on track with what you're...
Rajesh K. Agrawal
We are on track with the integration, yes.
Michael A. Salop
Sara Gubins - BofA Merrill Lynch, Research Division
Sara Gubins with BoA Merrill Lynch. I was hoping that you could talk about exclusivity of agents on the consumer-to-consumer side. What you're seeing in trends there? And to maybe how much of the business goes through exclusive agents now?
Stewart A. Stockdale
If you look in most of our send markets around the world, which is one of the drivers, it's not the only driver, but most of the send world is exclusive. So if you look at the U.S., if you look at Europe, there's -- Russia is not exclusive. You have a number of receive markets around the world that are nonexclusive. So you have Mexico, you have Africa and so forth. But the bulk of the origination per se is exclusive, and that's the state of the business today.
Sara Gubins - BofA Merrill Lynch, Research Division
Do you see that changing over the next few years?
You never can predict the regulations, right? From our -- no, I think our brand has a value. Our brand attracts customers to the locations. And we want to keep our agents, especially the send side, exclusive. And that's -- because I don't want that they see Western Union sign, and they come in and they are turned to another transaction. And the agents value that one. Because if you look at our top 40 agents, Stewart, I believe they've been with us more than 30 years. 30 years. So they really value the brand awareness. You saw the testament from Correos, it drives traffic in their locations because our brand has a value, and I don't want to give that up.
Sara Gubins - BofA Merrill Lynch, Research Division
And could you talk about the economics of your relationship with the mobile providers?
You want to take that?
Sure, I'll take that one. The way we work with the mobile operators is really very similar to our agents, where we have a commission-based structure. So what we're really providing is the ability in the exchange for them to be able to collect or send money or receive money into an e-wallet, so their mobile wallet in this case. And so with the mobile operators, we work with them on a commission base. And usually that commission base is obviously a little bit on the lower end because they obviously don't have to do as much work as our core agents with cash collection.
I had a couple of questions, one on the C2C and one on the B2B. So on the C2C side, you showed that pyramid where you showed the rates of growth of the unserved becoming underserved, underbanked. And there was some pretty healthy growth rates there. But that doesn't seem to be translating into your growth. Is that because maybe the rate at which the underserved are moving up into the high net worth of net worth categories? And the bank categories is happening also pretty quickly? Or the banks are moving down? So I guess that's the first question.
Yes, it's really a combination of all actually. There's a lot also on the net worth, high net worth actually moving down as well, as others moving up. And I think the key is in the past, Western Union and part of the -- I know hopefully no one in the room, right? But the part of the pyramid, I think, to keep it -- the people at the very bottom of the pyramid who are beginning to move up, the bulk of them are in life sustenance, right? They're looking for the next meal on the wire, so they're moving up. There's a progression even within the unbanked and underbanked. So I think it takes time for that. So I think there's an opportunity for us to grow. And at Western Union, we've been a little more focused in the past just purely on the migrant base, and now we're starting to really expand that, and that's really where our focus has continued to shift here over the last year.
I think we see the growth, huge growth in this area. But you don't -- it's not material enough to see it in the general parts, almost $6 billion business.
And on the B2B side, you talked a lot about Dodd-Frank, and basically there's more global regulation coming just pressuring banks and their returns on equity and capital. So do you think maybe your -- maybe banks will be also coming after the B2B segment? And maybe that will prevent you from achieving the kind of growth rates that you're expecting?
Rajesh K. Agrawal
Well, the large market share today is with banks already. So they already have 90% to 95% of the market. And as you've seen in many of the presentations, we're working very closely with the banks to actually be our partners in this initiative, as well as the Western Union agents. So I see us continuing on along the path that we've defined working with more banks, the FI vertical for us is a key opportunity for expansion. So I see that as a big growth opportunity. The banks do have most of the shares today, though, as you look at it.
But it's not their core competency, so it's really [indiscernible]
Rajesh K. Agrawal
Yes, it's not.
Michael A. Salop
Andrew W. Jeffrey - SunTrust Robinson Humphrey, Inc., Research Division
I didn't hear -- Andrew Jeffrey, SunTrust. I didn't hear any discussion today or very little about pricing. And it strikes me that -- a couple of things, pricing seems to have gone a little more stable in the last year or 2. You've got thousands of global corridors across which pricing pressure is very different. So how sophisticated are your pricing models? How much of an opportunity you're looking at to arbitrage across all these corridors? And maybe view that more as a revenue growth opportunity rather than a headwind that it's been over the last several years?
Stewart A. Stockdale
I mean, obviously, pricing, you were led to believe over the years that we were going to do 1% to 3% usually in a decline. If you saw the last couple of years, that's been reversed. And this year, it will probably be in the 1% range. So that's kind of our guidance. What we're doing on an ongoing basis, we're raising and lowering prices. The fact -- and we've got numerous initiatives around the globe that you're not hearing about on a day-to-day basis. And we do have models and sensitivity models on how to play with the fee and the FX. And we're constantly trading -- I mean, Mother's Day is coming up tomorrow, right? It's a big, big time for our Mexico business. Those FX rates are going up and down on a daily basis based on market volatility. So we're playing with pricing, and we've actually gotten over the course of the last couple of years, few years, very sophisticated with sensitivity models. So you don't hear about it as much because I don't think the pressure is the same one as the one we had with repositioning the domestic business in the U.S. or the traditional 3% growth, the decline in pricing. But what we do want to do is constantly play with that barometer and sometimes you're going to see it got up, and sometimes you're going -- last year, we did an FX move that was a price up, which helped keep that 1% range. So yes, it's something that we're doing every time and we're getting more sophisticated, kind of like the airlines do with their yield management. So we have some statisticians that are just banging away at data and looking at almost every corner on the planet and where do we have opportunity -- different -- by band and by FX and by fee. And we always talk about the fee, but it's the FX that really plays a big, big role in this all.
Michael A. Salop
We'll take one more question in the room, and it's James.
James E. Friedman - Susquehanna Financial Group, LLLP, Research Division
Scott, it sounds you've done a good job with the tax planning to repatriate a lot of your cash. Just on Page 8, I wasn't sure what the benchmark was. You said $700 million domestic, and a lot of cash flow is being generated domestic. I guess if you could give us some sense of the magnitude of that shift? And also what sort of flexibility that creates for you to potentially increase the dividend?
Scott T. Scheirman
Yes. Let me walk through it step-by-step, if you will, just to be real clear that as of March 31, there are about -- we're roughly $700 million of cash on our balance sheet, as you suggested. And then for the next 12 months, say starting April 1 forward, a majority of our cash flows will be U.S.-based or U.S. characteristics, if you will, because of the settlement agreement with the IRS and then also some planning that we've done. So that adds a fair amount of flexibility with U.S. cash or U.S. cash flows. On an ongoing basis talk, longer term, if you will, all things considered, our U.S. cash flows will be about 35%, international will be about 65%. But also keep in mind that as EBITDA increases, then so does our borrowing capacity at that 2x term. So when you factor all these things in, when we talk about stock buyback, dividends and so forth over the next 3 to 4 years on a long-term basis, we feel like we have all the cash, U.S. cash flows or cash balances to both buy back stock and increase the dividend. As we think about the dividend and the discussion we had with our board, is we clearly want to have a balanced payout, but since 2009, we've increased the dividend 4x, so strong track record of increasing that dividend. And as the business performs, we'll have discussions with our board, but we'd also like to increase that dividend as we move forward. But also given where the intrinsic value and the market value of the stock is at, we think it's important to buy back the stock. But the good news is that the $1 billion of cash flow, we're a very capital-light business. We can deploy a whole lot of cash flow towards investing in the business but returning capital to shareholders in the forms of stock buyback and dividend.
James E. Friedman - Susquehanna Financial Group, LLLP, Research Division
Just to follow up on that, do you target a payout ratio with the dividend? Or are you conscious of where the S&P is?
Scott T. Scheirman
For sure, we're conscious of where the S&P is. And over the next 3 years, Hikmet, myself, the board, we'll have discussions. We've got some things in mind of where we may want to get to. Again, we wanted to follow along with the business performance and so forth. And very much hearing, from our shareholders, the importance of a dividend but also of returning cash to shareholders given where the stock price is at right now. We think it's a good buy, to be buying a stock, too. Thank you for your question.
Michael A. Salop
Thanks, everyone. I'm going to turn it over to Hikmet for some final remarks. I will say, if you're joining us for lunch, please go directly downstairs after Hikmet's remarks. All the presenters will be down there if you want to talk to them more, ask more questions, but we would like to get the guest speaker started on time.
Thank you. I just want to say thank you for being here. We are, as you could see, very much focused on shareholder return. Thank you for being a shareholder of Western Union. I believe as our business grows and we are focused on the executing on our growth objectives, is it in the Global Consumer Financial Services, is it in our core business, is it in the Business Solutions or in the Ventures, we are not only focused short-term to drive the shareholder value, but also long term. We are changing the company, we are taking to the next level. We put the fundamentals, and the beauty of that is that we are building on our existing assets. We have the global brand awareness, we have the global network, we have the regulatory environment. It scares to death the competitors to enter this market with ultimate state, but it's good. It's good that this business is complex because we have the competencies.
And we are very focused as a team with our agents to take this company to the next level. With the growth, the margin expansion will come. Our investments is in the Ventures or is in the sales force to grow the business will pay back. I'm very confident about that.
We do have challenges, economic challenges, globally. Parts of worldwide, parts of Europe still have challenges, parts of other and unemployment rate doesn't help. But this will change, that will help also to grow our business. The regulatory environment challenges are here. They are constantly happening, but it's part of our business. However, I believe that we have the right business plan, right model to grow this business short term and long term.
Thank you for attending. As Mike said, I think we have now lunch, and very interesting guest speaker to talk also about the global remittance market over migration path. Thank you for being here.
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