As a new rush to adopt new cutting-edge technologies across a range of industries sweeps the business world, the financial sector is not one to be left behind. In fact, finance and technology have been closely intertwined with each other, as the former has a heavy dependence on the latter to provide a range of innovative products and services.
In that regard, it seems like there is a race among various heavyweight names in the financial industry to adopt stablecoins. Stablecoins are a type of cryptocurrency designed to maintain a stable value, unlike volatile digital assets such as Bitcoin (BTCUSD) or Ethereum (ETHUSD). They are usually pegged to the value of a reserve asset (like the U.S. dollar, euro, or gold) or sometimes backed by algorithms that control supply and demand.
While established names like J.P. Morgan (JPM), Goldman Sachs (GS), and Bank of America (BAC) have already launched or are in the process of offering their own stablecoins, upstarts like USDC stablecoin-issuer Circle (CRCL) have had a tremendous debut on the stock exchanges.
And it seems the latest to join the list will be Western Union (WU)
About Western Union
Founded in 1851, Western Union is a global leader in money transfer and financial services, operating through a vast network of agent locations and digital platforms. It primarily offers cross-border, cross-currency money movement and payments services company. Its market cap currently stands at $2.7 billion.
The WU stock is down 20% year-to-date (YTD), while offering a substantial dividend yield of 11.24%. This exceeds the sector median of 1.36%.
Meanwhile, Western Union's plans to make a foray into the stablecoin domain seem like a strategic fit, considering its international money transfer business. About the speculations, CEO Devin McGranahan almost verified it by stating, “We are exploring the opportunity for us to issue a stablecoin, particularly in non-U.S. markets.” Also, not ruling out being acquired by a bigger player in the stablecoin industry (read: Circle), McGranahan said, “If someone came and offered us the appropriate value that we believe the company is worth, we obviously would entertain that.”
Notably, the company acknowledged the potential of stablecoins during its earnings presentation last month, saying it aims to use the technology to cut down on friction and float in cross-border transfers, allow for on-ramps and off-ramps for crypto-fiat conversions, lower its dependence on intermediaries, and bring crypto capabilities to its digital wallet.
So, does this make the WU stock a “Buy?” Well, not really, and here's why.
Financials Do Not Inspire Confidence
For the most recent quarter, Western Union not only reported a fall in revenue and earnings, but it also missed the consensus estimates. Revenues for the quarter declined marginally on a year-over-year (YOY) basis to $1.03 billion from $1.07 billion. The core money transfer business saw a yearly decline of 8% to $885 million, while the consumer services business saw a 39% jump in the same period to $141.1 million.
Earnings slipped to $0.42 per share from $0.44 per share in the year-ago period, missing the Street expectations of an EPS of $0.44. Notably, out of the past nine quarters, the company has reported an earnings miss on three occasions.
Over the long term, as well, the trend has been discouraging. Revenues have declined at a CAGR of 2.98% in the past 10 years, with earnings growing by just 0.54% in the same period.
Coming to cash flows, however, the picture appeared much brighter. For the six months ended June 30, Western Union reported net cash from operating activities of $147.9 million, compared to just $60.2 million in the same period a year ago. Overall, the company closed the quarter with a cash balance of about a billion dollars, which was lower than its debt levels of $2.7 billion.
For the full year of 2025, the company expects revenue to be in the range of $4.03 billion-$4.14 billion and EPS to be between $1.65-$1.75. While the midpoint of the revenue range would impute a yearly decline of 2.9%, the same for earnings would indicate a sharp decline of 38%.
In a State of Terminal Decline
The CEO’s remarks about launching a stablecoin didn’t sound convincing. There was no clear plan, no timeline, and nothing that explained how the company expects to make it happen. It felt more like a throwaway comment designed to grab attention and maybe give the stock a short-term bump. Western Union has still not explained whether this will be a real product or just an experiment.
Meanwhile, the competition is already well ahead. Wise (WISE) and Remitly (RELY) are growing fast, and PayPal (PYPL) has gone one step further by actually launching its own stablecoin, PayPal USD (PYUSD). These players have the scale and technology to stay ahead, which puts Western Union in a tough spot.
Notably, on the policy side, the risks are also growing. The recently passed tax bill, known as the “One Big, Beautiful Bill Act” has a new 3.5% tax on remittances sent abroad by foreign workers, even those with green cards. This could reduce transaction volumes sharply because most migrant workers are very price sensitive. Traditional players like Western Union, MoneyGram, and International Money Express may feel the pain the most, since their physical agent networks are costlier to run. In contrast, digital-first companies such as Wise and Remitly are more flexible and can keep prices low.
Further, there’s also new pressure on compliance. The CFPB wants remittance providers to give customers a clearer breakdown of fees. Once people see exactly what they’re paying, they are more likely to switch to lower-cost services. Western Union’s average fee of close to 8%, doesn’t look very competitive in that light.
And then there’s the bigger picture. Conflicts, sanctions, and geopolitical tensions can easily disrupt money transfers across borders. For a company like Western Union, that’s a real vulnerability. The company acknowledged as much in its 2024 Annual Report:
“Demand for our services could soften, due to civil unrest, war, terrorism, natural disasters, including those related to climate change, public health emergencies or epidemics, and any changes arising as a result of the recent United States elections. For example, in March 2022, we suspended our operations in Russia and Belarus, due to the Russia/Ukraine conflict (the “Conflict”), which has had an adverse effect on our business, financial condition, results of operations, and cash flows. The Conflict has had and is expected to continue to have broader implications for our overall business, including reduced transaction activity in Ukraine.”
Analyst Opinion
Thus, amid all these headwinds, analysts have attributed a rating of “Moderate Sell” for the stock, with a mean target price of $8.81, indicating limited upside from current levels. Out of 18 analysts covering the stock, 10 have a “Hold” rating, one has a “Moderate Sell” rating, and seven have a “Strong Sell” rating.
On the date of publication, Pathikrit Bose did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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