Founded in 1851, Western Union began as a telegraph company in Rochester, New York. It grew from the delivery of telegrams to become a national oligopolist in the mid-nineteenth century. In 1861, Western Union opened the first transcontinental telegraph line. The company later acquired 500 other telegraph companies.
The company also started offering telex services in New York City in 1958. Western Union had a monopoly in the telegraph industry for over 100 years. However, as telephony and telegraph communications became more popular, Western Union faced growing competition.
Western Union also began offering a charge card for consumers in 1914. The company gave metal plates to select customers. These plates allowed deferred payment. Other industries began using credit cards in the late 1800s. However, credit cards weren’t widely accepted by retailers. Some merchants were even willing to accept paper store credit cards.
In 1879, Western Union settled a patent lawsuit with Alexander Graham Bell. However, the company rejected Bell’s offer to buy the patent. In 1881, the company acquired Atlantic and Pacific Telegraph Company. Jay Gould took control of the merged company and became its controlling shareholder.
Western Union diversified its operations in the late 1950s to offer telex, automatic teletypewriter, and money order services. It also leased facilities to Germany and the United Kingdom. Western Union also entered the satellite communications industry with the purchase of Westar, a communications satellite. In 1979, Western Union International was acquired by Xerox. In 1981, the company acquired fifty percent of Airfone. The company also acquired the digital payment unit of Saudi Arabia’s STC Group.
The company reorganized in 1988, renaming itself Western Union Corporation. It became the nation’s leading provider of telegraph and telecommunications services. In 2010, the company reported revenues of $5.2 billion. Its headquarters are located in Kansas City, Missouri. The company has offices in Denver, New York, Los Angeles, Denver, and San Francisco.
Western Union is also known for its history of maintaining communications satellites. Its facilities provided proof-of-concept for packet switching, the precursor to modern Internet. In 2000, Western Union began to transfer money online. During this time, Western Union also partnered with E. F. Hutton & Co. and launched a commercial intercity microwave communications system.
Western Union has developed technologies that enable consumers to make money transfers with ease. It also consolidated small telegraph companies in California. The company was founded by Ezra Cornell and Hiram Sibley.
Western Union also developed technologies that allowed consumers to send money internationally without a bank account. It began sending money outside of the United States when deregulation occurred. It has also been successful in identifying opportunities in developed markets. Its business model generates strong cash flow. Its business model is a good strategy for Western Union to follow in the future.
As part of its restructuring strategy, Western Union centralized its operations in less expensive locations. Its digital operations were also centralized. In 1991, the company changed its name to New Valley Corporation. The company also launched dedicated Facebook pages for consumers.