Western Union

Western Union Company
Company type	Public company
Industry	Financial services
Predecessor	New York and Mississippi Valley Printing Telegraph Company
Founded	January 1, 1851; 175 years ago in Rochester, New York, United States
Founder	Samuel L. Selden, Hiram Sibley, et al.
Headquarters	Denver, Colorado, United States
Area served	Worldwide
Key people	Robert J. Amman (former CEO)
Products	Money transfer services, financial services
Parent	None
Website	www.westernunion.com

Western Union Company is a global financial services enterprise based in Denver, Colorado, United States.

Originally established in 1851 as the New York and Mississippi Valley Printing Telegraph Company in Rochester, New York, it adopted the name Western Union Telegraph Company in 1856 following a merger with multiple telegraph organizations. From the 1860s through the 1980s, it held a dominant position in American telegraphy, pioneering advancements such as telex and broadening its offerings to include wire money transfers alongside its telegram business.

Confronted with financial difficulties during the 1980s, Western Union transitioned its primary focus away from telecommunications towards money transfer services, ultimately ceasing all communications operations by 2006. At that point, The New York Times characterized it as "the world's largest money-transfer business," largely fueled by remittances sent by immigrants across borders.

A landmark achievement in its history was completing the first transcontinental telegraph in 1861, which linked the eastern and western United States and delivered initial dispatches to President Abraham Lincoln, representing a pivotal development in the nation’s communications network.

Establishment & growth (1851–1866)

The New York and Mississippi Valley Printing Telegraph Company was created in Rochester, New York in 1851 by Samuel L. Selden, Hiram Sibley, among others. In 1856, it merged with a rival firm, the Erie and Michigan Telegraph Company, managed by John James Speed, Francis Ormand Jonathan Smith, and Ezra Cornell. At Cornell’s urging, the company adopted the Western Union Telegraph Company name.

In 1857, Western Union became part of the 'Treaty of Six Nations,' an alliance of six leading telegraph companies aimed at establishing regional monopolies through a shared mainline infrastructure. Subsequently, Western Union pursued an aggressive acquisition strategy of both large and small telegraph firms, transforming from a regional monopoly into a national oligopoly by 1864. Its chief competitors during this period were the American Telegraph Company and the United States Telegraph Company.

The company completed the first transcontinental telegraph line in 1861, sending its inaugural messages to President Abraham Lincoln. Additionally, it initiated the Russian–American Telegraph Company project to link America to Europe via Alaska and Siberia but discontinued this effort in 1867 after the successful installation of the transatlantic telegraph cable in 1866.

Market leadership & emerging rivals (1866–1881)

By acquiring principal competitors—the American Telegraph Company and United States Telegraph Company—in 1866, Western Union secured an almost exclusive hold on the U.S. telegraph market. The firm diversified by introducing innovative services such as the first stock ticker in 1866, implementing a standardized time service by 1870, and launching wire money transfer operations in 1871.

Throughout the 1870s, Western Union encountered competition from the Atlantic and Pacific Telegraph Company as well as from Bell Telephone Company’s emerging telephone technology. Although Western Union briefly ventured into telephony, it withdrew from this sector in 1879 following resolution of a patent dispute with Bell.

In 1881, financier Jay Gould engineered a consolidation between Atlantic and Pacific Telegraph Company and Western Union, obtaining controlling interest that enhanced Western Union’s market dominance and strategic influence within telecommunications.

Monopoly and Decline of Telegraph Services (1881–1963)

Western Union was among the initial eleven firms listed in the Dow Jones Railroad Average when it was established in 1884. By the turn of the century, the company managed over a million miles of telegraph infrastructure and operated two international submarine cables, securing a leading role in worldwide communication networks.

In 1909, AT&T purchased a 30% share in Western Union but was compelled to divest this stake by 1913 following antitrust rulings, thereby reinstating Western Union’s autonomy.

In 1945, Western Union acquired its principal rival, Postal Telegraph, Inc., thereby reinforcing its dominant position in the American telegraph market. Nonetheless, the widespread adoption of telephones caused telegraph message traffic to decline drastically—dropping nearly 50% between 1945 and 1960—adversely affecting its primary operations.

To broaden its offerings, Western Union introduced telex services in New York City in 1958 utilizing Siemens equipment and later Teletype machines. By 1960, it had established limited international telex links with London and Paris.

As part of a promotional strategy to stimulate telegram use, Western Union launched the Candygram in 1959—a telegram accompanied by a box of chocolates—endorsed by radio host Don Wilson. This initiative exemplified the company’s efforts to innovate amid diminishing telegraph demand.

Spin-Off of Western Union International

In 1963, Western Union divested its international cable networks and telegraph line rights into a separate entity named Western Union International (WUI), which was sold to American Securities. WUI went public on the New York Stock Exchange in 1967 under American Securities’ ownership. Xerox purchased WUI in 1979 for $207 million in stock and subsequently sold it to MCI Communications in 1981 for $185 million cash. MCI rebranded WUI as MCI International, thus retiring the Western Union brand from this division.

Industry Consolidation (1963–1984)

Western Union expanded its telecommunications portfolio by acquiring the TWX network from AT&T in 1969, removing a significant competitor in telex services. In 1974, it became the first American telecom firm to operate geostationary communications satellites by launching the Westar series. These satellites supported telegrams, mailgrams, telex, and TWX systems while generating income through transponder leases for video, voice, data, and fax communications. However, following financial difficulties in the early 1980s, Western Union divested Westar and its associated ground facilities to Hughes Aircraft in 1988.

In 1981, Western Union obtained a 50% interest in Airfone but sold this stake to GTE for $39 million in 1986. After the deregulation of financial services in 1982, the company expanded into international wire transfer services, signaling a strategic pivot towards financial transaction operations.

Financial Challenges, Bankruptcies, and Restructuring (1984–2006)

By 1984, Western Union was experiencing profit declines and escalating debt levels, leading to negotiations with creditors for debt restructuring. In 1987, investor Bennett S. LeBow took control through a leveraged recapitalization valued at $900 million involving high-yield bonds and preferred stock underwritten by Michael Milken’s Drexel Burnham Lambert. LeBow appointed Robert J. Amman as president and CEO; Amman directed an extensive strategic and operational overhaul over six years.

Under Amman’s leadership, Western Union transitioned from capital-intensive communications services toward consumer-focused money transfer financial services. The corporation was divided into two segments: an expanding money transfer division and non-core telecommunications assets such as long-distance voice networks, satellites, and submarine cables.

Between 1987 and 1990, aided by special advisor Robert A. Schriesheim, Western Union disposed of four non-essential telecom properties for approximately $280 million. In December 1990, its business services division—including Easylink electronic mail and Telex—was sold to AT&T for $180 million, marking Western Union’s exit from telecommunications carrier operations.

In 1991, as part of bankruptcy protection measures designed to alleviate excessive debt while growing its money transfer business, the company rebranded itself as New Valley Corporation. This renaming sought to shield the Western Union brand from adverse publicity during restructuring. With Amman’s management and LeBow’s support, corporate valuation rose substantially during chapter 11 proceedings.

Following additional restructuring efforts and negotiations involving major bondholder Carl Icahn, New Valley was acquired at bankruptcy auction in 1994 by First Financial Management Corporation for $1.2 billion. First Financial subsequently merged with First Data Corporation in 1995 in a transaction valued at $6 billion—representing a key milestone in Western Union’s corporate transformation.

Public Offering & Global Growth (2006–Present)

On January 26, 2006, First Data revealed its intention to separate Western Union into an independent publicly traded financial services firm specializing in money transfers through a tax-exempt spin-off to First Data shareholders. This separation was finalized on September 29, 2006. The day after, Western Union ceased its telegram transmission and delivery operations.

In May 2009, Western Union acquired Custom House, a Canadian company owned by Peter Gustavson, for US$371 million. This acquisition prompted the rebranding of its corporate division as Western Union Business Solutions. Subsequently, in January 2011, the company purchased Angelo Costa, a European money transfer organization with 7,500 retail outlets, for US$200 million.

The acquisition of Travelex's Global Business Payments unit for £606 million occurred in July 2011, significantly enhancing Western Union’s corporate payment services. Later that year, in October 2011, Western Union completed the purchase of Finint S.r.l., a prominent European agent network comprising over 10,000 subagent locations throughout Italy, Spain, and the United Kingdom.

Speculation about a merger with rival MoneyGram emerged in May 2015 amid revenue declines for both firms; however, Western Union officially denied these claims. In January 2017, Ant Financial made an $880 million bid to acquire MoneyGram but was blocked by U.S. regulators due to national security concerns.

In 2018, Western Union shifted its headquarters from Englewood, Colorado to the Denver Tech Center. The former Englewood facility was sold in 2020 for $40 million. November 2020 marked a strategic investment of $200 million by Western Union to obtain a 15% equity stake in Saudi Telecom Company’s digital payments division, signaling an expansion into the Middle Eastern digital finance sector.

Amid geopolitical tensions triggered by the Russian invasion of Ukraine, Western Union halted its operations in Russia and Belarus during 2022.

Wire Transfer

Western Union facilitates global money transfers both online and through its network of agent locations. Recipients can collect cash by presenting the unique 10-digit Money Transfer Control Number (MTCN) along with valid identification; in certain cases, a secret question adds an extra layer of security.

Western Union Mobile

Launched in October 2007 via a collaboration with the GSM Association, this mobile money transfer service capitalizes on the widespread adoption of mobile phones. It integrates Western Union’s core platform with mobile banking and wallet services provided by telecom operators and financial institutions worldwide, thereby broadening access across international markets.

Western Union Connect

Introduced in October 2015, Western Union Connect broadened the company’s digital reach through alliances with major messaging platforms such as WeChat and Viber. This service enables users to send up to $100 internationally for a set fee plus applicable exchange rate charges and targets an expanding demographic of mobile and online remittance customers spanning over 200 countries.

Communications

Western Union historically offered multiple telecommunications services including:

Terrestrial microwave transmission networks
Business communication systems such as Telex and TWX (obtained from AT&T Corporation)
Leased voice and data lines
Long-distance telephone services
Airfone air-to-ground radiotelephone operations (1981–1986)
Early ventures into cellular phone technology during the 1980s

Due to diminishing returns, these divisions were divested by the late 1980s. Significant transactions included selling its satellite fleet to Hughes Aircraft Company in 1988 and transferring Airfone services to GTE in 1986.

Charge card

In 1914, Western Union pioneered the issuance of the first charge card, representing an early advancement in payment technology.

BidPay

With the expansion of e-commerce, Western Union introduced BidPay, which was renamed "Western Union Auction Payments" in 2004 before reverting to its original name. The platform was discontinued on December 31, 2005, and subsequently acquired by CyberSource Corp. for US$1.8 million in March 2006, with plans to revive it. Nevertheless, CyberSource terminated BidPay services by the end of 2007.

Sponsorship

Western Union has strategically utilized sponsorships to boost brand recognition and strengthen its market presence. It acted as the shirt sponsor for the Sydney Roosters NRL team between 2002 and 2003 and continues to maintain support through other avenues. On a global scale, the company backs community events that connect with diaspora groups vital to its money transfer operations.

The firm also sponsored pay-per-view events for WWE and WCW, including No Way Out (1998) and Slamboree 2000. From 2012 until 2015, Western Union was a presenting partner of the UEFA Europa League, enhancing its footprint across European markets.

In Bangladesh, Western Union was the title sponsor of the Dhaka Premier Division Football League during the 2003–04 season, demonstrating its commitment to local market engagement.

The First Data Western Union Foundation contributes to international philanthropic efforts; notably, it provided US$1 million for relief following the 2004 Indian Ocean tsunami.

More recently, Western Union entered into a three-year jersey sponsorship agreement with the NBA's Denver Nuggets beginning in the 2017–18 season. Furthermore, Liverpool F.C. named Western Union as their inaugural sleeve sponsor under a £25 million five-year contract starting in 2017–18, significantly increasing the company's visibility in global football markets.

Involvement in early computer networking

Western Union telegram transmissions relied on a store and forward message switching architecture. Telegraph systems initially operated manually before evolving into semi-automatic teleprinter setups utilizing punched paper tape. This progression culminated in Plan 55-A (1948–1976), Western Union’s fully automated paper tape switching system featuring automatic message routing.

Serving as the primary contractor for the Automatic Digital Network (AUTODIN) project, Western Union played a crucial role in military communications from the 1960s until AUTODIN was superseded by the Defense Message System (DMS) in 2000. AUTODIN achieved an availability rate of 99.99%, employing mechanical punched card readers and leased communication lines while processing up to 20 million messages monthly at peak capacity. Western Union’s unsuccessful efforts to develop AUTODIN II led to BBN Technologies creating a packet-switched network that laid groundwork for today’s Internet.

A notable commercial innovation arising from AUTODIN was Western Union’s EasyLink service—among the earliest email platforms available to non-government users. EasyLink facilitated simultaneous message delivery via email, fax, mailgram, or telex and provided research tools through its InfoLink application. This service was eventually spun off and is currently part of OpenText.

Fraud schemes and money laundering concerns

Although Western Union advises users to avoid transferring funds to unfamiliar parties, its platform remains a common tool exploited in online fraud schemes. Despite ongoing awareness campaigns, fraudsters continue to misuse Western Union for advance-fee and romance-related scams. While payout locations are documented, access to this information requires legal subpoenas, which hampers efforts to recover defrauded money. As a protective measure, marketplaces such as eBay have prohibited payments via Western Union.

In January 2017, Western Union acknowledged its involvement in wire fraud and consented to a $586 million settlement after neglecting to adequately investigate numerous scam complaints involving fictitious job offers and lottery winnings. Criminal operators frequently shared illicit proceeds with agents who facilitated these fraudulent transactions.

Money laundering and terrorism financing issues

In May 2015, the Central Bank of Ireland imposed a €1.75 million penalty on Western Union for failing to implement sufficient anti-money laundering safeguards, including inadequate training for agents and inability to detect suspicious low-value transactions often linked to money laundering and terrorist funding.

Reports indicated that some US agents assisted Chinese immigrants in sending hundreds of millions of dollars to human traffickers by structuring transfers to circumvent reporting rules. In 2017, Western Union reached a $586 million settlement with the US Department of Justice over violations related to money laundering and consumer fraud, admitting its inadvertent facilitation of criminal networks involved in fraud and human trafficking. These charges were dismissed in 2020 following fulfillment of compliance requirements.

In 2018, the New York State Department of Financial Services fined Western Union $60 million for prioritizing revenue over anti-money laundering responsibilities by maintaining partnerships with suspicious yet profitable agents.

On May 29, 2019, Odilon Almeida, serving as executive vice president and president of Global Money Transfer at the time, left Western Union under circumstances resembling those surrounding his predecessor Stewart Stockdale’s departure in 2012.

Alleged ties to military intelligence

The book The One Percent Doctrine: Deep Inside America's Pursuit of Its Enemies Since 9/11 claimed that Western Union supplied personal data to United States military intelligence agencies.

Anti-competitive conduct

Western Union has been accused of engaging in anti-competitive conduct in African markets where limited competition allows it to impose elevated money transfer fees. The Overseas Development Institute reported an “Africa charge” averaging 8%, applied consistently regardless of market size or regulatory expenses, with some fees surpassing 10%. Africa remains the most costly region globally for remittances, leading to estimated excess charges between $1.4 billion and $2.3 billion annually.

Critics have also pointed out that Western Union’s exclusive agreements with recipient country banks restrict competition by forcing customers to use designated banks, which contributes to higher-than-average transaction costs.

In February 2016, Harada Ltd lodged an antitrust complaint with the European Union regulator accusing Western Union of colluding with banks to exclude smaller competitors. Although the European Commission conducted an investigation, it ultimately dismissed the claims and ruled in favor of Western Union.

References

Notes

Further reading

Gallagher, Edward A. (1971) Getting the Message Across: The Story of Western Union. Newcomen Society
Wolff, Joshua D. (2013) Western Union and the Creation of the American Corporate Order, 1845–1893. Cambridge University Press

External links

Guide to the Western Union Telegraph Company Records | National Museum of American History
Telegram for America, industrial film illustrating Western Union telegram processing (1956)
Western Union Telegram Collection at University of Mississippi Libraries