Western Union CEO Hikmet Ersek seemed surprisingly open to adopting Bitcoin, which has become one of the greatest potential threats to his business. Bitcoin has made inroads into the remittance market, fulfilling what can be viewed as a similar function to Western Union but without what’s perceived by many as exorbitant fees.
Speaking with Bloomberg TV’s Trish Regan from the Clinton Global Initiative in Denver, Regan raised the subject of Bitcoin- an increasingly common practice on Bloomberg TV as Bitcoin gains popularity and CEO’s are expected to express views on it:
Regan: In a little bit, I’m going to be speaking with Barry Silbert, CEO of SecondMarket. SecondMarket will help bidders take part in the Bitcoin auction that will be happening this week. Let me ask you about Bitcoin and your view of it as a potential currency. You know your biggest criticism is that you guys are too expensive. How much of a threat is something like Bitcoin, which is clearly much cheaper to move across the globe?
Ersek: First of all, the challenge that we are the most expensive..otherwise, the customers will not use us…we are one the world’s largest money transfer companies. Obviously customers do like us. But on Bitcoin, we settle and pay out in 121 currencies. When customers want us, they pay in 121 currencies. Once Bitcoin would be regulated by the regulators [by] which it would be a proper currency, why not also use bitcoin?
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Regan: You would use Bitcoin? Whoa, backup. You would use bitcoin as a method of transferring money. It would be another currency?
Ersek: It’s regulated as a currency, but it’s not regulated as a currency. That’s the issue of the coin. We are a very regulated industry. If bitcoin is regulated and the customer wants that, why not? We do 121 currencies.
Regan: So you would consider looking at Bitcoin as making (122) currencies.
Immediately after the Bitcoin discussion, Regan revisited the issue of Western Union’s fees. Specifically, how the company will fare in an increasingly crowded space populated by lower-cost competition. This may soon include Apple as well.
Ersek replied that “it’s not easy to move money cross-border.” They have a presence in 16,000 corridors and 200 countries. Money is paid out within minutes in 121 currencies. It has its price. He believes that they will continue to be highly competitive because of the value they bring to the table.