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Topic: 2013-04-18 FoxBusiness - Bitcoin Buzz Draws Western Union, MoneyGram (Read 2393 times)

legendary
Activity: 2506
Merit: 1010
Western Union is roughly in the same position now as Blockbuster was in 10 years ago.

Exactly.  It isn't that blockbuster couldn't rent a movie at a profit, but that they had to get a lot of customers through the door so that little bit of profit per-movie multiplied many times was sufficient to pay the lease on the retail space, the staff, utilities, etc.

Western Union's model is tied to a two-step process by one company ...    Western Union receives money in one location and pays out that money (less fee and conversion costs) to someone in another location.    Bitcoin obliterates that model as there are now to independent actions that occur.  One party buys bitcoins in one location.   A different party sells bitcoins in some other location.     This means there is no reliance on a trusted party in the middle. 

This eliminates all the hawalders as well.   Well, not eliminates, it simply allows them to work independently.  They simply become bitcoin exchangers.  It is much easier for them to not need to deal with both sides of a money transfer.

Since money transfer is a business with an 8% to 20% vig (depending on where from and where to), there will be a lot of people who will welcome Bitcoin's arrival in this space.

legendary
Activity: 938
Merit: 1001
bitcoin - the aerogel of money
Either Western Union embraces cryptocurrencies or it goes bankrupt in 5-10 years.

Western Union is roughly in the same position now as Blockbuster was in 10 years ago. The fact that Blockbuster failed to embrace the Internet early on, even though the warning signs were crystal clear, was their downfall. Western Union, take heed.
full member
Activity: 210
Merit: 100
The more I think of it, the more obvious would it be for Western Union and Moneygram to accept Bitcoin. Just from a marketing / PR perspective this makes a lot of sense. All they need to do is get a few of their offices in California to start selling bitcoins, add a payment option on their site (Bitpay could help them with that) and get a few nerds from SF or LA to buy a few coins in front of the media.
 
For WU or MG this would mean tremendous free publicity and an image of being technologically saffy and exploring new frontiers. They don't even have to make money selling bitcoins, just the PR stunt is enough. Once there's enough demand, they could gradually expand the number of offices which sell bitcoins.
legendary
Activity: 1386
Merit: 1000
WU could literally decide to make all of their places into the equivalent of Bitcoin atms in a single day if it wanted to. All it would take is them deciding to serve as an exchange. They already do it through a ton of other currencies, they wouldn't even have to make any new software other than a Bitcoind wrapper.

Right... Because they have unlimited bitcoin reserves...

Dude, they would just add a commission on walk-in BTC buy and BTC sells like any other service doing this (of which most are currently online). It really wouldn't be that difficult for them to implement - I'm sure WU (well established international financial business) could afford to buy any BTC they'd need to get started - if they didn't have a system in place with trading bots on some of the exchanges to buy the coins in real time or something else just as clever Smiley
hero member
Activity: 490
Merit: 500
... it only gets better...
WU could literally decide to make all of their places into the equivalent of Bitcoin atms in a single day if it wanted to. All it would take is them deciding to serve as an exchange. They already do it through a ton of other currencies, they wouldn't even have to make any new software other than a Bitcoind wrapper.

Right... Because they have unlimited bitcoin reserves...
legendary
Activity: 1386
Merit: 1000
WU could literally decide to make all of their places into the equivalent of Bitcoin atms in a single day if it wanted to. All it would take is them deciding to serve as an exchange. They already do it through a ton of other currencies, they wouldn't even have to make any new software other than a Bitcoind wrapper.

Exactly. If someone from WU is reading this you are in the enviable position to create the first, global, walk in, BTC purchasing network on Earth!
full member
Activity: 168
Merit: 100
WU could literally decide to make all of their places into the equivalent of Bitcoin atms in a single day if it wanted to. All it would take is them deciding to serve as an exchange. They already do it through a ton of other currencies, they wouldn't even have to make any new software other than a Bitcoind wrapper.
mrb
legendary
Activity: 1512
Merit: 1028
Since when shooting oneself in the foot is a good business strategy? Any kind of strategy for that matter?

Bitcoin is a typical case of so-called disruptive technology (you should read The Innovator's Dilemma). So if current financial market leaders don't offer Bitcoin services to customers, someone else will and this someone else will eat their market anyway.

So the only way they can survive is to adopt Bitcoin, even though it will probably reduce their overall profit margins.
legendary
Activity: 1288
Merit: 1080
In fact I'd say the first business to enable walk in purchases of Bitcoin at physical in-store locations around the globe (making BTC far more accessible to all) will make a killing.

Agreed.
legendary
Activity: 1078
Merit: 1003



I tend not to believe WU/MG are seriously considering this.


It would be like painting a big 'bureaucratics, please rape me in the arse' target on their back.


Granted, I need to do more research on this topic, but I have a distinct feeling that govt would not like WU/MG piggybacking on Bitcoin for their remittance network.



But but but progress and innovation Sad  What's with the government and hating anything which can help them succeed?
sr. member
Activity: 322
Merit: 250


I tend not to believe WU/MG are seriously considering this.


It would be like painting a big 'bureaucrats, please rape me in the arse' target on their back.


Granted, I need to do more research on this topic, but I have a distinct feeling that govt would not like WU/MG piggybacking on Bitcoin for their remittance network.

legendary
Activity: 3920
Merit: 2349
Eadem mutata resurgo
Bitcoin network structure that is completely independent of the banks gives MoneyGram and Western Union options to completely route around the banking networks, fiat currency and the arcane AML/KYC regulatory capture hurdles for their remittance businesses.

Bitcoin gives them a network tool to beat the banks at their own games. They would be great ally for bitcoin. Western Union transfers only become such a pain in the ass to deal with after the banks imposed the rules via their bought and paid for congress critters.
legendary
Activity: 1458
Merit: 1006
Greatest news of all time.
legendary
Activity: 1078
Merit: 1003
Quote
Remittances go to pay for housing and for food and for maintaining your family," he said. "If you're sending to a rural part of Mexico, my guess is that the merchant is not going to be accepting bitcoins. They want pesos."
- Read more: http://www.foxbusiness.com/news/2013/04/18/bitcoin-buzz-draws-western-union-moneygram/#ixzz2QqtZN0Rb

Yup.  But instead of having to go down to the Western Union agent location to pick some pesos up, you send a text to your friend's sister who buys bitcoins and pays pesos in exchange.   That person makes a little from each transaction.  Western Union gets about $8 + a vig on the exchange rate, so for a remittance transfer valued  at $100 the remittance recipient might get just $88.      With the person providing independently money exchange, that same transaction might deliver $94 worth and the person providing the exchange makes at least $5.  Sure that's not a lot of money but six of those a day and that person would be making more with this side job than from other employment options.



Ouch.  All the more reason to adopt Bitcoin in all its naked glory Grin
legendary
Activity: 2506
Merit: 1010
Quote
Remittances go to pay for housing and for food and for maintaining your family," he said. "If you're sending to a rural part of Mexico, my guess is that the merchant is not going to be accepting bitcoins. They want pesos."
- Read more: http://www.foxbusiness.com/news/2013/04/18/bitcoin-buzz-draws-western-union-moneygram/#ixzz2QqtZN0Rb

Yup.  But instead of having to go down to the Western Union agent location to pick some pesos up, you send a text to your friend's sister who buys bitcoins and pays pesos in exchange.   That person makes a little from each transaction.  Western Union gets about $8 + a vig on the exchange rate, so for a remittance transfer valued  at $100 the remittance recipient might get just $88.      With the person providing independently money exchange, that same transaction might deliver $94 worth and the person providing the exchange makes at least $5.  Sure that's not a lot of money but six of those a day and that person would be making more with this side job than from other employment options.

hero member
Activity: 531
Merit: 501
Since when shooting oneself in the foot is a good business strategy? Any kind of strategy for that matter?

I'm not so sure the shooting your own foot analogy applies.
Their business model is fees. How the hell are they going to convince people to send money through them via bitcoin without turning people straight to bitcoin - no middle man lesser fee situation?

The only way it would work is if they helped fund exchanges, and made it considerably less of a bitch than it is now.  I think they'll try to cater to the Bitcoin crowd, but wouldn't necessarily adopt Bitcoin itself.

They could charge fees for exchanging money between BTC and local currencies. Also WU spends huge amounts of money on anti fraud procedures to comply with their licensing agreements. If they became a Bitcoin exchanger and encouraged customers to bypass their proprietary payment network and use the blockchain instead they could absolve themselves of policing payments and save loads of money.   
hero member
Activity: 490
Merit: 500
... it only gets better...
Grr.. Removed my post by mistake.

This is defintelly a great win for BTC but for them it the "last gasp for air". (better analogy needed) Like Mike said if anything happens they are going to cater to the coin users. Feel priviledged. :3
legendary
Activity: 1078
Merit: 1003
Since when shooting oneself in the foot is a good business strategy? Any kind of strategy for that matter?

I'm not so sure the shooting your own foot analogy applies.
Their business model is fees. How the hell are they going to convince people to send money through them via bitcoin without turning people straight to bitcoin - no middle man lesser fee situation?

The only way it would work is if they helped fund exchanges, and made it considerably less of a bitch than it is now.  I think they'll try to cater to the Bitcoin crowd, but wouldn't necessarily adopt Bitcoin itself.
full member
Activity: 224
Merit: 100
Since when shooting oneself in the foot is a good business strategy? Any kind of strategy for that matter?

They have a worldwide network of offices where money can be changed, compliant with all local and international laws. If they would add Bitcoin to the list of currencies their customers would be able to buy, they could easily become the market leader in exchanging Bitcoins.

This was my first thought.
full member
Activity: 210
Merit: 100
Since when shooting oneself in the foot is a good business strategy? Any kind of strategy for that matter?

They have a worldwide network of offices where money can be changed, compliant with all local and international laws. If they would add Bitcoin to the list of currencies their customers would be able to buy, they could easily become the market leader in exchanging Bitcoins.
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