Western Union

Western Union

The Western Union Company (NYSE: WU) is a financial services and communications company based in the United States. Its North American headquarters are in Greenwood Village, Colorado, and its international marketing and commercial services headquarters are in Montvale, New Jersey. Until it discontinued the service, this company was the best known US company in the business of exchanging telegrams.

Western Union has a number of divisions, with products such as person-to-person money transfer, money orders, and commercial services. As of June 9, 2006, the company has 270,000 Western Union agent locations in over 200 countries and territories. Reported revenues top $3 billion annually.


Western Union was founded in Rochester, New York, in 1851 as The New York and Mississippi Valley Printing Telegraph Company.

After a series of acquisitions of competing companies by Hiram Sibley & Don Alonzo Watson the company changed its name to Western Union Telegraph Company in 1856 at the insistence of Ezra Cornell, one of the founders of Cornell University, to signify the joining of telegraph lines from coast to coast.

Western Union completed the first transcontinental telegraph line in 1861. In 1865 it formed the Russian American Telegraph in an attempt to link America to Europe, via Alaska, into Siberia, to Moscow.

The telegraph was dominated by Western Union, an industrialized monopoly. They were the first communications empire and the beginning of what was to come for the future of communications as it is known today.

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. As the telephone replaced the telegraph, money transfer would become its primary business.

When the Dow Jones Transportation Average stock market index for the NYSE was created in 1884, Western Union was one of the original eleven companies tracked.

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 to customers. 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 beam to replace land lines.

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.

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 worldwideSM" and expanding its agent locations internationally.

In 1986, Western Union and GTE became owners of Airfone.

Western Union was bought by First Financial Management Corporation in 1994, which a year later merged with First Data Corporation. 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 discontinued after Western Union Corp.'s bankruptcy.

The spinoff was completed in December and Western Union is now an independent, publicly traded company.

Western Union is also the name of a ship that worked for the same company laying telegraph cable in the Caribbean and South America. She is currently working in Key West, Florida, where she was built and launched. The Western Union is 130 feet long and weighs 91.91 tons and is currently configured as a passenger vessel.

On September 10, 2007, Los Angeles area immigrant and community organizations joined the Transnational Institute for Grassroots Research and Action (TIGRA) to launch a nationwide boycott against Western Union. This boycott was scheduled two days before a general consumer boycott by immigrants. Groups accuse Western Union of charging exorbitant fees while failing to adequately reinvest in immigrant communities. The community organizations demand that Western Union abandon its "predatory financial practices" or face an ongoing boycott.

Immigrant advocates called for Western Union to adopt a Transnational Community Benefits Agreement (TCBA). According to the advocacy group, the agreement would "lower remittance fees, establish fairer exchange rates, and provide for community reinvestment." According to the advocacy group, Western Union and other money transfer agencies often function as the primary banking service in immigrant communities through check cashing services, yet they remain unregulated by the Community Reinvestment Act and are unaccountable to their primarily low-wage customer base.

Internet precursors

Western Union was involved 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 was an extremely primitive service that used mechanical card readers and tab machines to send and receive data over leased circuits. 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 was of limited usefulness and obsolete decades before 2000. That is simply when the service was finally stopped.

A related innovation that came from AUTODIN was Western Union's computer based EasyLink service. This service was developed for business application. This system allowed for one of the first marketable electronic mail 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.


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 31 December 2005 and was purchased for USD$1.8 million in March 2006 by CyberSource Corp. who announced their intention to re-launch BidPay.

Western Union Mobile

In October of 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.

Other service offerings

Along with satellite telecommunications, Western Union was also quite active in other forms of telecommunication services:

* common carrier terrestrial microwave networks,
* long distance telephone service
* landline-based leased voice and data communication circuits
* 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)
* early messaging networks such as TWX, which was acquired from AT&T (the founder of the TWX network) and renamed Telex II by Western Union, and Telex.


Western Union was a major Jersey sponsor of the Sydney Roosters NRL team from 2002-2003. The company still sponsors the team, but not as a jersey sponsor. Around the world, Western Union sponsors numerous community events that help support the diaspora communities that use the global Money Transfer service.

The First Data Western Union Foundation donates money to worthy causes around the world. After the 2004 Indian Ocean tsunami, the Foundation donated $1,000,000 US dollars to the relief effort.

End of telegrams

As of July 2006, The Western Union website showed this notice:

"Effective January 27, 2006, 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 and Canada is still available, operated by iTelegram and other companies.

Popular money laundering tool

Western Union always 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 provides one of the most popular services for internet fraud from scammers. Western Union has been required to maintain records of pay-out locations to the criminals who launder the money but this information may only be obtained through the use of a subpoena. Often pay-out location information is useless since there are no extradition treaties with Nigeria. Hence 419 and romance scammers continue to receive funds via Western Union confident in the knowledge that money lost to Nigerian /USA and Europe scammers through Western Union is almost always unrecoverable.

It is for this reason it is banned as a medium of payment through eBay.

New security policies and customer complaints

Western Union has begun blocking transactions based on suspicion of terrorist connections, as a part of the company's intimate involvement with the War on Terror. In practice, this has often meant denying service to senders who specify recipients with Arabic-sounding names. Transactions which do not involve persons with such names will sometimes be denied as well, based on criteria which the company refuses to disclose. Currently, transfers sent from the Western Union web site require telephone confirmation of the sender's identity. On occasion, the transfer will inexplicably fail. 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. The total cost of the transaction, however, is still charged to the sender's bank card, to be refunded after several days. Numerous customers have reported this problem.

Popular culture

The company, famous for telegrams, was often parodied in cartoons as "Western Onion" or "Eastern Onion" anytime a character received a telegram (in Homeless Hare, for example). (Credit: Wikipedia).


Western Union


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