Page 30



As Vice President of Product, leading innovation and development at Western Union Business Solutions, Scott Johnson drove the launch of WU Edge, a trading platform that’s offering global opportunities to thousands of small businesses With more than 550,000 agent locations across the globe, Western Union’s distinctive black and yellow logo has inspired huge brand recognition and loyalty over the years. Be it at a kiosk in rural Africa or a corner shop in London’s urban jungle, it’s universally recognised as the portal that enables migrant families separated by economic need, as well as small businesses that are often excluded from mainstream financial services, to survive. In 2018, it moved an astonishing $300billion around the world and handled more than 800 million transactions in individual remittances and commercial transfers – much of it paid and collected in cash. But the arrival of new, entirely digital money transfer agents is forcing a change in its business model; and open banking and application programming interface (API) technology is giving it the freedom to achieve it. Scott Johnson leads product innovation and development at Western Union Business Solutions as vice president of product. He sees open banking as a ‘massive opportunity’ to transform the way Western Union, and indeed the world, distributes its money. By creating aggregated services across multiple providers, he says, established financial services such as WU will benefit – and, ultimately, so will customers. “Whether it’s through APIs or embedded solutions, it’ll be possible to join forces with firms that in the past might have been competitors in order to provide better consumer experiences and solve problems more efficiently for our customers,” says Johnson. The driving force behind Western Union Business Solutions’ modernisation programme, Johnson helped launch WU Edge, the company’s digital platform and


TheFintechMagazine | Issue 13

associated trading area for small and medium-sized businesses, in 2016, as well as Western Union’s payments solution for non-government organisations, who are often working in crisis conditions – the most demonstrable way it delivers on its brand promise to ’move money for better’. Edge enables SMEs to expand their global reach by letting them send, receive and manage international payments in more than 130 currencies in 200 countries and territories, while also connecting them with each other: suppliers with buyers and customers with products as well as services. Companies which sign up can link their dashboard to their WU holding accounts in various currencies, where they can initiate payments and integrate their accounting systems. By having greater visibility of all their accounts and contracts, and automating payment processes, Western Union says customers both increase productivity and gain confidence in their trading environment, as it extends them access to an international marketplace that in many areas of the developing world they probably thought unattainable. And the key to all this is collaboration with partners, says Johnson. “We try to pull in data from as many sources as possible, through various partners, whether it’s an accounting package or, in the future, open banking APIs,” he says. “[This means] we have a

They’re here to make a transcaction or hedge some FX risk… we want to make sure they can do it as quickly and efficiently as possible

richer sense of our customers’ overall financial picture and, ultimately, can provide them with advice so that they can make better decisions about their risk management and payment needs. “Edge, for example, has a rich set of reporting capabilities that allows businesses to understand their payables and receivables over time, and then model what changes in exchange rates could do to the cost of those goods, or their bottom line if they’re selling.”

Opening up opportunities The rise of open banking and, specifically in Europe, the revised Payment Services Directive (PSD2), enables third-party developers to create new digital financial management services. By September 2018, all financial service providers and online retailers are expected to be fully compliant with the European Union’s PSD2 legislation, which will have two principle effects, say Johnson. The first will be that it mandates good practices around strong customer authentication. “Many financial institutions have been very focussed on meeting the compliance needs of PSD2 first, making sure they have appropriate security and fraud prevention in their platforms and their APIs are ready.” After that, he believes the onus will be on European banks – which PSD2 forces to share data with third-party financial service providers through open APIs – to take one of two approaches. “I think the front-end experience is going to be critical here and the firms that have the most frictionless and seamless approach to user interface and user experience design will win,” he says. Their other option is to become part of the financial plumbing – the infrastructure that supports frontends built by third parties. “You can still win at plumbing,” says


Fintech Finance presents: The Fintech Magazine Issue 13  

Fintech Finance presents: The Fintech Magazine Issue 13

Fintech Finance presents: The Fintech Magazine Issue 13  

Fintech Finance presents: The Fintech Magazine Issue 13