Of the 818 billion Western Union consumers transferred in 2017 91 was sent across international borders Raj Agrawal finance chief of the company estimated that westernunioncom money-transfer revenue which includes use of the mobile app last year topped 400 million or about 11 of consumer revenue The digital business has been growing at a roughly 20 annual rate and this year company executives expect 500 million in digital revenue he added Its becoming a more meaningful part of our revenue Although the digital business currently makes up a relatively small portion of Western Unions top line it represents the companys strongest growth prospects analysts said Theres no denying that theres a transition from a world of cash-centric transfers to one in which digital wallets are becoming much more commonly used said Darrin Peller an analyst for Wolfe Research The bottom line is that they have no choice they must invest in e-commerce Some analysts wonder if Western Union has been slow in making digital a priority and whether it has ceded meaningful ground to aspiring fintech rivals in the race to become the international equivalent of Venmo the popular mobile money-transfer service owned by PayPal Holdings Inc Competitors such as PayPals Xoom Corp WorldRemit Ltd TransferWise Ltd and Remitly Inc are leveraging smartphones and other technologies to drive down the cost of sending money across borders It would have been nice to have seen Western Union do more acquisitions in this space Mr Peller said That would have helped accelerate the process earlier They are not too late but they could have done more earlier Western Unions digital expansion is aimed at grabbing more of the remittance market which accounted for about 485 billion in international transfers to developing countries according to the World Bank We are going to be able to address a larger portion of the market Mr Agrawal said In the coming weeks the company plans to launch digital operations in crucial hubs such as Malaysia Singapore Mexico and the United Arab Emirates Last month the company introduced its mobile app in Mexico where remittance inflows last year totaled 31 billion Western Unions ultimate goal is to allow customers in 200 countries to be able to send and receive money using whatever methods they choose whether that means digital services or a walk-up window at a retail location That would be up from 45 countries where it currently offers that level of service variety The company has some advantages that provide a buffer against fintech competition muscular compliance and regulatory capabilities and a far-reaching physical retail presence that spans countries where cash is still king analysts said Sending a money transfer digitally from one mobile user to another requires that both parties are linked to bank accounts which is still a barrier for some users Few companies outside of bricks-and-mortar money-transfer firms MoneyGram International Inc and Euronet Worldwide Incs Ria Money Transfer subsidiary can match Western Unions comprehensive reach Working only in digital you can only serve those who have a bank account said Bob Napoli an analyst for William Blair Everyone is saying cash is going away but I dont think that will happen in my lifetime You still need those payout locations Write to Ezequiel Minaya at ezequielminaya wsjcom