The Western Union Company is a financial services and communications company based in the United States. Its North American headquarters is at Englewood, 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 September 9, 2008, the company has 350,000 Western Union agent locations in over 240 countries and territories. Reported revenues top $5 billion annually.
After a series of acquisitions of competing companies by Hiram Sibley and 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.
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 the 1980s Western Union organized its cable systems properties and its right-of-way rights of its telegraph lines into a subsidiary called Western Union International. In 1990 it sold this subsidiary to MCI Communications which renamed it to MCI International and moved its headquarters from New York City to Westchester County, New York.
In 1987, Investor Bennett S. LeBow acquired Western Union.
The official name of the corporation was changed to New Valley Corporation in 1991, just in time for that entity to seek bankruptcy protection. The name change was taken to shield the Western Union name from being dragged through the proceedings (and the bad PR that would cause).. Under the leadership of LeBow and COO Howard Lorber, the company's stock price rose from $1 to $240 a share in three years .
New Valley 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 New Valley Corporation's bankruptcy.
The spin off was completed in September and Western Union is now an independent, publicly traded company.
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.
AUTODIN was an extremely primitive service that used mechanical punchcard readers and tab machines to send and receive data over leased lines. 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 service ceased in 2000, years after it had become obsolete.
A related innovation that came from AUTODIN was Western Union's computer based EasyLink service. This system allowed for one of the first marketable email 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.
"Effective 2006-01-27, 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.
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.
The First Data Western Union Foundation donates money to charitable causes around the world. After the 2004 Indian Ocean tsunami, the Foundation donated US$1,000,000 to the relief effort.
It is for this reason it is banned as a medium of payment through eBay.