Western Union: Banking & Finance for the Poor

Banks make money by lending out the money that you deposit. The more cash you put in, the better you’re treated - transactions take priority, fees get waived, interest rates are higher, and a personal banker is assigned. On the flip side, the less money in your account, the more fees you pay, and the further back in the line you start from. Banks chase affluent accounts who bring large balances and high cash flow. But it’s not just banks - every business aims for as many high spenders and wealthy as possible. Yet there are 2 companies - Western Union and MoneyGram, that have gone in the opposite direction in providing financial services in peer-to-peer money transfer (international & domestic) to a population that banks deem to be too poor and too low-value. Migrant workers and the poor are left out of the global financial system for similar reasons: they have too little money, their employment is volatile, their earnings are inconsistent, there are significant language and cultural barriers, they lack documentation, etc. In this episode, we’ll cover the business of Western Union and MoneyGram, how these companies drive economic growth in developing countries, and how the market is pushing their evolution into a bank for the poor. 💬 Join the Modern MBA community - ☕️ Support Modern MBA on Patreon and unlock additional content, exclusive essays, and Q&A: 🔎 YouTube is full of outstanding creators, but high-quality content is often hard to find. Favoree lets you explore, rate, and review YouTube channels. Discover their new website - 0:00 Sending Money for Better 7:49 Distributed Systems 19:54 Banking the Unbanked