|Traded as||NYSE: WU
S&P 500 Component
|Headquarters||Englewood, Colorado, United States|
|Key people||Jack M. Greenberg
(President and CEO)
|Revenue||US$ 5.193 billion (2010)|
|Operating income||US$ 1.300 billion (2010)|
|Net income||US$ 909.9 million (2010)|
|Total assets||US$ 7.929 billion (2010)|
|Total equity||US$ 582.7 million (2010)|
|Employees||7,000 (December 2010)|
The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is in Englewood, Colorado. Up until it discontinued the service in 2006, Western Union was the best-known U.S. company in the business of exchanging telegrams.
Western Union has several divisions, with products such as person-to-person money transfer, money orders, business payments and commercial services.
Western Union, as an industrialized monopoly, dominated the telegraph industry in the late 19th century. It was the first communications empire and set a pattern for American-style communications businesses as they are known today.
19th century 
In 1851, the New York and Mississippi Valley Printing Telegraph Company was organized in Rochester, New York by Hiram Sibley and others, with the goal of creating one great telegraph system with unified and efficient operations. Meanwhile, Ezra Cornell had bought back one of his bankrupt companies and renamed it the New York & Western Union Telegraph Company. Originally fierce competitors, by 1855 both groups were finally convinced that consolidation was their only alternative for progress. The merged company was named The Western Union Telegraph Company at Cornell's insistence, and Western Union was born.
Western Union bought out smaller companies rapidly, and by 1860 its lines reached from the East Coast to the Mississippi River, and from the Great Lakes to the Ohio River. In 1861 it opened the first transcontinental telegraph. In 1865 it formed the Russian American Telegraph in an attempt to link America to Europe, via Alaska, into Siberia, to Moscow. (This project was abandoned in 1867.) The company enjoyed phenomenal growth during the next few years. Its capitalization rose from $385,700 in 1858 to $41 million in 1876. However it was top-heavy with stock issues, and faced growing competition from several firms, especially the Atlantic and Pacific Telegraph Company--itself taken over by financier Jay Gould in 1875.:196-201 In 1881 Gould took control of Western Union.
It introduced the first stock ticker in 1866, and a standardized time service in 1870. The next year, 1871, the company introduced its money transfer service, based on its extensive telegraph network. In 1879, Western Union left the telephone business, having lost a patent lawsuit with Bell Telephone Company. As the telephone replaced the telegraph, money transfer would become its primary business.
By 1900 Western Union operated a million miles of telegraph lines and two international undersea cables.
20th century 
The company continued to grow, acquiring more than 500 smaller competitors. Its monopoly power was almost complete in 1943 when it bought Postal Telegraph, Inc., its chief rival.
In 1914 Western Union offered the first charge card for consumers; in 1923 it introduced teletypewriters to join its branches. Singing telegrams followed in 1933, intercity fax in 1935, and commercial intercity microwave communications in 1943. In 1958, it began offering Telex service to customers in New York City. Western Union introduced the 'Candygram' in the 1960s, a box of chocolates accompanying a telegram featured in a commercial with the rotund Don Wilson. In 1964, Western Union initiated a transcontinental microwave system to replace land lines.
During World War II, families of sons in the military service dreaded the Western Union "boy on his bicycle" to arrive at their home with a telegram from the War Department or the Navy Department. The message began: The Secretary of War (soldiers and airmen) or Secretary of Navy (sailors and marines), regrets to inform you that, (name, rank and serial number of the man in the military service) was killed in action or missing in action.
Western Union became the first American telecommunications corporation to maintain its own fleet of geosynchronous communication satellites, starting in 1974. The fleet of satellites, called Westar, carried communications within the Western Union company for telegram and mailgram message data to Western Union bureaus nationwide. It also handled traffic for its Telex and TWX (Telex II) services. The Westar satellites' transponders were also leased by other companies for relaying video, voice, data, and facsimile (fax) transmissions.
In 1963 Western Union organized its international cable system properties and its right-of-way for connecting international telegraph lines into a separate company called Western Union International (WUI) which it divested that year to American Securities. In 1983 American Securities sold WUI to MCI Communications which renamed it to MCI International and moved its headquarters from New York City to Rye Brook, New York.
In the 1970s WUI installed and leased to the U.S. Department of Defense (DOD) dedicated 50 Kbps high speed telecommunications facilities between the continental U.S. and Hawaii, Germany and the United Kingdom to provide a test bed for the DOD's Advanced Research Projects Agency (ARPA). This test bed provided ARPA with a proof of concept for the technology of packet switching which later became the Internet.
In 1976, Western Union partnered with E. F. Hutton & Co..
Due to declining profits and mounting debts, Western Union slowly began to divest itself of telecommunications-based assets starting in the early 1980s. Due to deregulation at the time, Western Union began sending money outside the country, re-inventing itself as "The fastest way to send money worldwide" and expanding its agent locations internationally.
In 1987, Investor Bennett S. LeBow acquired control of Western Union through an outside of chapter 11 process that was a complex leveraged recapitalization. The transaction was backed by a total of $900 million in high yield bonds and preferred stock underwritten by Michael Milken's group at Drexel Burnham Lambert as part of an exchange offer. LeBow installed Robert J. Amman as President and CEO who led a complete strategic, operational and balance sheet restructuring of the company over the subsequent 6 years.
Mr. Amman executed a strategy of redirecting Western Union from being an asset-based provider of communications services, with a money transfer business as a large but less important part of the business, into being a provider of consumer-based money transfer financial services. In so doing, Mr. Amman ran the company as two separate companies. One business consisted of the money transfer business, which was funded and operated to take advantage of the significant growth opportunity. The second unit consisted of all the non-strategic communications assets such as the long distance analog voice network, satellite business and undersea cable assets. In the 3 year period through 1990 Mr. Amman was supported by Robert A. Schriesheim, also installed by Mr. LeBow, as a special advisor who oversaw the divestiture of the four non-strategic telecommunications assets for about $280 million.
The official name of the corporation was changed to New Valley Corporation in 1991, just in time for that entity to seek bankruptcy protection as part of Mr. Amman's strategy to eliminate the overleveraged balance sheet while continuing to grow the money transfer business . The name change was taken to shield the Western Union name from being dragged through the proceedings (and the bad PR that would cause). Under the day to day leadership of Robert J. Amman and the backing of LeBow, the company's value increased dramatically through its years operating under chapter 11.
Following various restructurings that included negotiations with Carl Icahn who became a large bond holder, Mr. Amman engineered the sale of New Valley in a bankruptcy auction to First Financial Management Corporation in 1994 for $1.2 billion where he became vice chairman, and a year later merged with First Data Corporation in a $6 billion transaction. On January 26, 2006, First Data Corporation announced plans to spin Western Union off as an independent, publicly traded company. Western Union's focus will remain money transfers. The next day, Western Union announced that it would cease offering telegram transmission and delivery, the product most associated with the company throughout its history. This was, however, not the original Western Union telegram service, but a new service of First Data under the Western Union banner; the original telegram service was sold off after New Valley Corporation's bankruptcy and now operates as iTelegram.
The spin off was completed September 29, 2006 and Western Union became an independent, publicly traded company again.
Involvement in early computer networking 
Western Union telegrams were transmitted through a store and forward message switching system. Early versions were manual telegraph systems. Later systems using teleprinters were semi-automatic, using punched paper tape to receive, store, and retransmit messages. Plan 55-A, Western Union's last paper tape based switching system (1948–1976), was fully automatic, with automatic routing.
Western Union was a prime contractor in the Automatic Digital Network (AUTODIN) program. AUTODIN, a military application for communication, was first developed in the 1960s and became the precursor to the modern Internet in the 1990s. The Defense Message System (DMS) replaced AUTODIN in 2000.
AUTODIN, originally named "ComLogNet", was a highly reliable service that operated at 99.99% availability, using mechanical punched card readers and tab machines to send and receive data over leased lines. During the peak operation of AUTODIN, the United States portion of the network handled twenty million messages a month. Western Union failed in its attempts to engineer a replacement (AUTODIN II), leading to the development of an acceptable packet-switched network by BBN (the developer of the ARPANET) which became the foundation of today's Internet. AUTODIN service ceased in 2000, years after it had become obsolete.
A related innovation that came from AUTODIN was Western Union's computer based EasyLink service. This system allowed for one of the first marketable email systems for non-government users. In addition, the system allowed the same message to be sent simultaneously to multiple recipients via email, fax, mailgram, or telex services; as well as receive messages from the integrated formats. With the service, users could also perform research utilizing its InfoLink application. EasyLink Services is now its own company.
End of telegrams 
As of February 2006, the Western Union website showed this notice:
"Effective 2006-01-27, Western Union will discontinue all Telegram and Commercial Messaging services. We regret any inconvenience this may cause you, and we thank you for your loyal patronage. If you have any questions or concerns, please contact a customer service representative."
This ended the era of telegrams which began in 1851 with the founding of the New York and Mississippi Valley Printing Telegraph Company, and which spanned 155 years of continuous service. Western Union reported that telegrams sent had fallen to a total of 20,000 a year, due to competition from other communication services such as email. Employees had been informed of the decision in mid-January.
Telegram service in the United States continues to be available through iTelegram and other companies.
In May 2009, Western Union announced their intention to acquire Custom House from Peter Gustavson. The deal closed in September 2009, with Western Union purchasing Custom House for $370 million USD. Its acquisition led the company to be re-branded as Western Union Business Solutions.
In January 2011, Western Union acquired the 100% of Angelo Costa, CEO Francesco Costa, a group active in money transfer and services to immigrants. Angelo Costa has a network of 7,500 points of sale in various European countries. The agreement was signed for $ 200 mln.
October 2011, Western Union completed the acquisition of Finint S.r.l., one of Western Union's leading money transfer network Agents in Europe, counting more than 10,000 subagent locations across Italy, Spain, and the United Kingdom.
Specific services 
Western Union's website, westernunion.com, allows users to send and receive funds to others, pay bills, or purchase gift cards.
As the Internet became an arena for commerce at the turn of the millennium, Western Union started its online services. BidPay was renamed "Western Union Auction Payments" in 2004 before being renamed back to BidPay. BidPay ceased operations on December 31, 2005, and was purchased for US$1.8 million in March 2006 by CyberSource Corp. who announced their intention to re-launch BidPay. BidPay was later discontinued by CyberSource effective December 31, 2007.
Western Union Mobile 
In October 2007, Western Union announced plans to introduce a mobile money transfer service with the GSM Association, a global trade association representing more than 700 mobile operators in 218 countries and covering 2.5 billion mobile subscribers.
The proliferation of mobile phones in developed and developing economies provides a widely accessible consumer device capable of delivering mobile financial services ranging from text notifications associated with Western Union cash delivery services to phone-based remittance options. Western Union's mobile money transfer service offering will connect its core money transfer platform to m-bank or m-wallet platforms provided by mobile operators and / or locally regulated financial institutions.
Sending and receiving funds 
In order to send funds, a sender goes to a Western Union office and presents funds (plus fees) for "Next Day" or "Money in Minutes" service. The sender provides his or her name and address, the recipient's name, and a designated payment destination. Western Union then provides the sender a 10-digit Money Transfer Control Number (MTCN) that the sender must provide to the recipient. The recipient then proceeds to a Western Union agent office in the designated payment location, presents the 10-digit MTCN, and a photo ID. Money is then paid out to the recipient. In some locations, if a recipient lacks identification documents, the sender and receiver can set up a pre-arranged password. Funds are paid out in cash, although if payment exceeds a local maximum or cash on hand, a check is issued. Alternatively, a sender may forward funds to a recipient by using Western Union's web site or by phone. In some countries, the recipient doesn’t need the MTCN number if he has sufficient identification.
Transfer fees 
Fees vary based on the sender and receiver's location, type of transfer, and whether the money is sent from a counter location or by the web site.
Past services 
Along with satellite telecommunications, Western Union was also active in other forms of telecommunication services:
- Common carrier terrestrial microwave networks
- Business communications networks such as Telex and TWX, which was acquired from AT&T Corporation and renamed Telex II by Western Union
- Landline-based leased voice and data communication circuits
- Long distance telephone service
- Airfone air-ground radiotelephone service from 1981 to 1986
- Cellular phone service for a very short time in the early 1980s (the phones were made by 2-way radio manufacturer E.F. Johnson Company)
Western Union was a major shirt-sponsor of the Sydney Roosters NRL team from 2002–2003. The company still sponsors the team, but not as a shirt-sponsor. Around the world, Western Union sponsors numerous community events that help support the diaspora communities that use the global Money Transfer service.
Scam industry 
Western Union advises its customers not to send money to someone that they have never met in person. Despite its efforts in increasing customers' awareness of the issue, Western Union is used for internet fraud by scammers.
Western Union has been required to maintain records of pay-out locations of the individuals who may be laundering the money, though this information may only be obtained through the use of a subpoena. Hence advance-fee fraud and romance scammers continue to receive funds via Western Union confident in the knowledge that money lost to overseas scammers is almost always unrecoverable. For this reason it is banned as a medium of payment through eBay.
Connection to military intelligence 
Blocked transactions 
Western Union has begun blocking transactions based on suspicion of terrorist connections, as a part of the company's involvement with the War on Terror. Currently, transfers sent from the Western Union web site require telephone confirmation of the sender's identity. On occasion, the transfer will fail and Western Union's customer service will inform the sender that the transaction "does not meet our requirements." If details are requested, no information other than the fact that their disclosure is forbidden will be given. Numerous customers have reported this problem.
Presidents of the company 
- Hiram Sibley (1856–1866)
- Jeptha Wade (1866–1867)
- William Orton (1867–1878)
- Norvin Green (1878–1893)
- Thomas Eckert (1893–1902)
- Robert Clowry (1902–1910)
- Theodore Vail (1910–1914)
- Newcomb Carlton (1914–1933)
- Roy White (1933–1941)
- Albert Williams (1941–)
- Walter P. Marshall (1948–1964)
- Russell McFall (1965–1979)
- Robert Flanagan (1979–1984)
- Roland Berner (1984)
- Robert Leventhal (1984–1988)
- Robert Amman (1988–1994)
See also 
- Western Union Telegraph Building (New York) – Former Headquarters
- 60 Hudson Street – Former headquarters
- 92 Code
- Pangram – The quick brown fox jumps over the lazy dog. Used by WU to test teleprinters.
- Pennsylvania v. New York — Question before the U.S. Supreme Court: when Western Union Money orders are supposed to escheat to the state if not fully redeemed, what state is to get the money?
- Western Union, 1939 schooner chartered by Western Union Telegraph Company, used in film as slave ship La Amistad
- "2010 Form 10-K, The Western Union Company". United States Securities and Exchange Commission.
- Schmotter, James W. (1992). Not Just Another School of Business Administration: A History of Graduate Management Education at Cornell University. Cornell University Press.
- Klein, Maury (1997). The Life and Legend of Jay Gould. Baltimore: Johns Hopkins University Press. ISBN 978-0-8018-5771-3.
- Renehan, Jr., Edward J. (2006). Dark Genius of Wall Street: The Misunderstood Life of Jay Gould, King of the Robber Barons. New York: Basic Books. p. 263. ISBN 978-0-465-06886-9.
- Wu, Tim, The Master Switch : The Rise and Fall of Information Empires, New York : Alfred A. Knopf, 2010. ISBN 978-0-307-26993-5
- Casson, Herbert Newton (1911). The History of the Telephone. Chicago: A.C. McClurg. pp. 81–84.
- Phillip R. Easterlin, “Telex in New York”, Western Union Technical Review, April 1959: 47 figure 4
- Bechtel, Warren. "Western Union Chronology of Events – 1851–1995". Retrieved October 14, 2008.
- "New Valley Corporation – Company History". Fundinguniverse.com. Retrieved October 3, 2011.
- Notice of the discontinuation of telegram services – From the Western Union website
- Archive of original message. Accessed July 15, 2008
- "Equita Financial Advisor to ISI Holding for the disposal of Angelo Costa to Western Union". January 2011.
- "Western Union to Acquire Travelex Global Business Payments". Businesswire. July 5, 2011.
- "Western Union Completes Acquisition of Finint S.r.l.". October 2011.
- "Western Union attracts almost 9 m visitors online". Siteanalytics.compete.com. Retrieved October 3, 2011.
- Authorize.Net Accessed April 2, 2008
- "$1,000,000 to relief". prneswsire.com.
- Western Union joins fraud fight – BBC
- David Derbyshire (March 3, 2007). "eBay-er Beware". National Post (Canada). p. FW5.
- Internet Crime Schemes – Internet Crime Complaint Center
- Ben Taylor; Khushwant Sachdave (October 29, 2005). "The ebay racketeers". DAILY MAIL (London). p. 19. "Three Romanian immigrants who conned eBay customers out of nearly Pounds 300,000 were behind bars last night. In the biggest Internet fraud of its kind, the gang fooled 3,000 bidders who they arrogantly described as 'idiots' into paying for goods that did not exist. Victims from around the world handed over sums of up to Pounds 5,000 for everything from concert tickets to motorbikes through the money transfer chain Western Union."
- David Brown (December 18, 2005). "Fraudsters Targeted In New eBay Crackdown". The People. p. 33. "The auction giant will protect customers by BANNING the use of online money transfers. Now eBay will bring in the ban – backed by Western Union and already in force in the US – from January 15 in the UK. It will tell punters to use secure payment systems that verify the identity of users, and which can track both buyers' and sellers' accounts."
- Suskind, Ron (2007), The One Percent Doctrine: Deep Inside America's Pursuit of Its Enemies Since 9/11, Simon & Schuster, ISBN 978-0-7432-7110-3
- Western Union Spying Worldwide – Cryptome
- Ming the Mechanic: Western Union sucks – The NewsLog of Flemming Funch
- Sundaram, Anjan (July 6, 2006). "Muslims denied wire transfers – Business – International Herald Tribune". The New York Times. Retrieved November 27, 2009.
- "Hiram Sibley Family Papers". University of Rochester. Retrieved October 31, 2009.
- Berry, Earl D. (September 5, 1897). "His was a useful life; Story of Jeptha H. Wade's evenful career. One of the first to build telegraph lines in the West and a founder of the Western Union." (PDF). The New York Times. Retrieved October 31, 2009.
- "Death of William Orton" (PDF). The New York Times. April 23, 1878. Retrieved October 31, 2009.
- "Dr. Norvin Green's Death" (PDF). The New York Times. February 13, 1893, Wednesday. Retrieved October 31, 2009.
- "Gen. T.T. Eckert Resigns" (PDF). The New York Times. March 13, 1902, Thursday. Retrieved October 31, 2009.
- "Vail New President of Western Union" (PDF). The New York Times. November 24, 1910, Thursday. Retrieved October 31, 2009.
- "Western Union ends merger" (PDF). The New York Times. April 9, 1914, Thursday. Retrieved October 31, 2009. Unknown parameter
- William R. Denslow; Harry S. Truman (1957). 10,000 Famous Freemasons from A to J Part One. Duke University Press. p. 183. ISBN 1-4179-7579-2.
- "White quits Jersey Road". The New York Times. May 26, 1933, Friday. Retrieved October 31, 2009. Unknown parameter
- "President of the Lehigh Valley Is Named to Head Western Union". The New York Times. June 18, 1941, Wednesday. Retrieved October 31, 2009.
- Andrew Pollack (November 22, 1982, Monday). "Western Union gets the message". The Ledger. Retrieved October 31, 2009.[dead link]
- "Western Union Chronology of Events – 1851–1995". westernunionalumni.com. Retrieved October 31, 2009.
- "Robert J. Amman". Forbes. Retrieved October 31, 2009.
- "Alan M. Silberstein". Forbes. Retrieved October 31, 2009.
- "Christina A. Gold". Forbes. Retrieved October 31, 2009.
Further reading 
- Wolff, Joshua D., “‘The Great Monopoly’: Western Union and the American Telegraph, 1845–1893” (PhD dissertation, Columbia University, 2008).
|Wikimedia Commons has media related to: Western Union|
- Western Union corporate website
- Company history timeline
- Western Union Telegram Collection (MUM00472) owned by the University of Mississippi
- Remittances to the Rescue? from Dollars & Sense (see sidebar for article on Western Union)
- Western Union Telegraph Company (1956). "Telegram for America". An industrial film showing Western Union telegram handling in the 1950s.
- History of Western Union
- Western Union website agent locations internationally
- Western Union Customer Service