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Western Union is confident that stc pay is poised for expansion and further growth in the future.
American financial services The Western Union Company (NYSE: WU) has agreed with Saudi Telecom Company to acquire 15% stake in stc pay. The Western Union Company announced the $200 million worth investment on the 22nd of November. Expectedly, the deal should close in the first quarter of 2021.
Western Union chief executive officer Hikmet Ersek expressed his pleasure over the company’s digital growth strategy in 2020. In 2020, digital partnerships fueled Western Union growth. The company reported that digital revenues climbed 45% year-on-year in the third quarter of the year. The CEO said that partnering with other financial companies is a strategy for Western Union to increase further.
Ersek added that he is pleased with the company’s partnership with stc pay on. He said the partnership has yielded positive results on Western Union’s digital growth.
The president of Global Network at Western Union, Jean Claude Farah, said:
“We are very excited about this investment in stc pay because of our demonstrated success working together…This is a great opportunity to participate in the growth potential of an innovative and dynamic financial services company such as stc pay and supporting its growing customer base through our market leading cross-border services.”
Farah also revealed that the Western Union Company is positioned to further expand into other digital payment services in the “Gulf region.”
More Comments on Western Union Deal with Stc Pay
The chairman of STC Group, Mohammed bin Khalid Abdullah Al Faisal, commented on the Western Union Company investment. He said that the acquisition shows that STC is a “digital enabler.” He also noted that the new deal formed the first “Saudi unicorn and the first fintech unicorn in the Middle East.”
Notably, the Western Union Company and STC Group are referred to as unicorns as both companies are valued at over $1 billion.
Stc group CEO Nasser Alnasser said:
“As a digital enabler and a pioneer in the digital transformation, we aspire to play a vital role in the vision of the Saudi Arabian Monetary Authorization (SAMA) in many initiatives that support creativity and developing the financial services, as Fintech is a pillar of stc strategy.”
Also, stc pay CEO Ahmed Alenazi said the company is “delighted” with Western Union recognizing its strong prospects.
STC said the new deal now values the company at $1.3 billion. The company added that the payment would support the company through its long-term expansion plans.
Despite beating analysts’ estimates in Q3, Western Union has been declining all year. The financial services provider declined nearly 23% over the past year and 21.96% in its year-to-date record. Also, the company lost 11.03% in the past three months. Western Union is also down 4.87% over the past month and 1.60% in the last five days. Currently, WU is at $20.90 in after-hours trading.