As part of my long-term study into the various operations of financial institutions, I have also come across ubiquitous payment processor Western Union. In what has now become seven years of writing about investments, I have never once endorsed Western Union as a potential investment. In early 2011, the stock traded at around $21 per share, a higher price than the current valuation of almost $17 per share, or around $7.5 billion.
Why do I never speak highly of it?
Because the terms of its costs with customers continues to get worse and worse.
The most vivid illustration of Western Union’s decline came in a working paper titled “Remittances and the Problem of Control: A Field Experiment Among Migrants From El Salvador” by Nava Ashraf, DIego Aycinena, Claudia Martinez, and Dean Yang.
Among many interesting data points, they observed that the typical El Salvadorian migrant worker in 1973, paid a … Read the rest of this article!