Between the freefall of the peso and galloping inflation, Western Union is gaining new fans in Argentina: tourists

Anyone walking the streets of Buenos Aires cannot fail to notice the superiority of the two types of establishments. On every corner there is either a “kiosk” – a shop where you can buy sweets, credit for a mobile phone and a ride on public transport, or a Western Union branch.

The yellow-and-black logo of the century-old American international transfer company, which became popular among Brazilians traveling with the lucrative (and legalized) system of exchanging reals for pesos, is now part of Argentina’s landscape.

Six thousand physical Western Union branches in the country – 300 of which are owned and the rest are franchised – serve a wide variety of audiences.

The group of those sending money abroad is mainly composed of immigrants from border countries, as well as Mexicans, Colombians, Venezuelans and other Latin Americans.

The flow of transfers from outside to Argentina is fueled by the “Germans” who have gone the opposite way. “These are Argentinians who left the country in large waves after the 2001 crisis and other subsequent events, trying to make life easier for their loved ones,” says Maximiliano Babina, general manager of Western Union in Argentina.

There is also a third public representation in local Western Union operations, in a move somewhat linked to the country’s latest crisis – which has faced inflation of 138% in 12 months and an endless devaluation of the peso.

These are foreign tourists. They are attracted by the gastronomy and beauty of Argentina, yes – but also by the weight quoted in the pool of souls, which makes the trip cheaper.

Over the past 12 months, the Argentine currency has grown by more than 200%. On Friday (20), one dollar was worth 880 pesos on the parallel market. Last week, the price reached more than 1,000 pesos amid uncertainty surrounding elections this Sunday (22) – a dispute that will only end in a runoff in November between current economy minister Sergio Massa and self-proclaimed anarcho-capitalist Javier Millay.


More than 5.3 million foreigners passed through the country this year, the second highest number in history, according to Inprotur, a local tourism promotion institute. Between January and September, Argentina recorded the highest number of tourists from the United States, Chile, Uruguay, Mexico, Canada, Ecuador, Costa Rica and Brazil in the last 13 years.

For them, transferring money to themselves and withdrawing pesos at Argentine Western Union stores is seen as a practical way to buy currency, Babina says.

This use is nothing new, but because the country presents such an interesting opportunity for tourism, and we are effectively spreading this opportunity to other markets, we see a significant increase in this behavior, mainly among Uruguayans, Brazilians, Chileans and Paraguayans, but these in to a lesser extent

Maximiliano Babina, CEO of Western Union in Argentina

Potential market in the 1990s

Born in 1851 as a telegraph company in Buffalo, New York, Western Union has had its own operations in Argentina since the early 1990s – in Brazil, the company began providing its services in 1997 through authorized agents, but just started working with its own bank and brokerage company in 2011.


Back in the 1990s, the international expansion plans of the American headquarters coincided with the adoption of Argentina’s convertibility law, according to which the peso became worth one dollar to cope with inflation (always the same).

“In those years, Argentina turned out to be a good opportunity for us to double our presence through a direct operation. There was a representative, but he did not use his full potential,” says Babina.

Because of the strong exchange rate of the peso at the time, the flow of remittances was mainly from within the country. “There was also a large flow of immigration coming in,” he says.

Western Union’s physical presence took on another dimension in Argentina in 2006 when it acquired 100% of Pago Fácil, the country’s popular bill payment network. The American was already a partner in the Macri Group, owned by Franco Macri, father of former president Maurizio Macri (2015-2019), in the company with a 25% stake since the founding of Pago Fácil.

News of the acquisition indicated that Pago Fácil had between 2,800 and 3,000 physical units at the time.


For several years, the management of the two companies did not carry out a significant integration of operations. “At that time, the strategy was not a merger, which changed in 2013, when we began to look for a full integration of business areas,” says the executive. “Today we are a two-brand, multi-product company.”

According to Babin, Argentina’s operations for both international transfers and bill payments are “very important” to Western Union’s business in Latin America. “On a global scale, given the current macroeconomics, this is irrelevant,” says the executive. The company does not disclose each market’s share of global results.

Balance between inflation and peso devaluation

Even so, for at least seven consecutive quarters, inflation in Argentina has been reported on Western Union’s global balance sheets as a contributor to revenue growth – at least from an accounting perspective.

In the second quarter of this year, revenue reached US$1.17 billion, an increase of 9% compared to the same period in 2022. Rising prices in Argentina, according to published results, increased the number by three percentage points.

But this is not always the case. For example, in the first quarter of 2020, the strengthening of the dollar against the Argentine peso resulted in a 3% negative impact on earnings, which was greater than the 1% gain gained through inflation during the same period. Western Union’s next global results for the third quarter of 2023 will be published on Wednesday (25).


When a country’s local currency depreciates, the short-term effect is to reduce foreign transfers because it reduces the ability of local senders to hold and send money. At the same time, the inflow increases, because the people of the country need to receive more money from their relatives in order to buy goods and services,” says Babina.

“It’s like the law of gravity. You can try to ignore it, but it will still affect you.”

Due to the fact that the second round of elections is scheduled for November 19, it is impossible not to wonder about the future of the campaign in Argentina. In addition to the stress caused by the change of power in the currency market, the proposal of candidate Javier Milea, who finished the first round with 30% of the vote, to dollarize the economy may be particularly sensitive for a company that lives by buying and selling. money..

“In Argentina, a company must be ready to respond to the commercial sphere, be flexible to adjust processes, creative to find solutions and resilient to try again,” says Babina. “We will adapt depending on how things will unfold. The migration could be massive or perhaps progressive. We’ll see.”


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