Our objective is to move forward without the uncertainty surrounding this issue, as well as, to contribute to improving conditions along the border. The legal matters date back to 2003 and the compliance procedures involved are not an issue today.
Over the years, we have made significant improvements to our compliance program, which we believe are the best in the industry. The agreement is not yet finalized but we anticipate completion before the end of the year. Scott will give details on the settlement accrual in his financial review.
Turning to the business, in the third quarter, we were pleased with our operational performance as transaction and revenue trends were consistent with the second quarter. The geographic diversity of our business enables us to shift investments in response to changing economic conditions.
C2C revenue declined 5% in the quarter or declined 3% constant currency adjusted on 3% transaction growth. Average revenue and principal amount per transaction were consistent with the levels experienced in the first half of the year. Our objective is to gain market share and we believe we have continued to make progress on this goal in 2009.
On a regional basis, Europe, Middle East, Africa and South Asia posted a revenue decrease of 3% with 8% transaction growth. Western Europe experienced consistent transaction growth rates compared to the second quarter, while Spain and Russia continued to be challenging markets in the region.
The Gulf states delivered strong transaction growth although growth moderated compared to the second quarter. In India, revenue grew 8% and transactions increased 16%.
We completed several agent signings in the region including Quick Money SA in Morocco, which operates 1,500 locations, Vigo Exchange in the United Arab Emirates and Sonali Bank, which is the largest government sector bank in Bangladesh. The Tatarstan post in Russia, which has the potential to add 1,000 location’s also joined the network.
The Americas region experienced a 10% revenue decline and a 4% transaction decrease. These rates showed slight improvement from the second quarter. Mexico results were stable relative to the second quarter as revenue declined 18% and transactions declined 13% in the quarter.
While Vigo and our independent class of trade underperformed market data, our larger regional and national agents performed in line. Our U.S. outbound business, the largest revenue component of our Americas region continued to post stable transaction trends.
In the Americas, we are executing on our go-to-market strategy, which includes growing the network through the banking class of trade, introducing new products with the expanded prepaid programs and repositioning of our domestic money transfer business through pricing, targeted marketing and customer segment expansion.
The U.S. domestic money transfer business declined 15% in revenue and 9% in transactions in the quarter and has exhibited negative trends for an extended period. In the fourth quarter, we are implementing a repositioning of our domestic money transfer business.
On October 1st, we implemented new domestic pricing that established standardized national prices and brought more consistency relative to U.S. outbound pricing. We launched the marketing blitz around the new pricing campaign and we will continue with significant promotional activity throughout the holidays.
The repositioning is designed to drive accelerated customer usage and improvement in transaction growth in the U.S. domestic market. The price actions are included in our 2% pricing reduction outlook for the year and we believe this is the right repositioning to turn around our domestic money transfer business.
Moving to Asia Pacific, revenue in the quarter increased 5% with a 15% increase in transactions. China''s trends improved relative to the first half with transaction and revenue growth of 7%. Our strategies to drive growth in China are beginning to pay dividends. Our targeted marketing efforts reflect an enhanced understanding of the diverse groups in China and the distinct related send locations.
We were pleased to renew our agreement with the Agricultural Bank of China with an additional 15,000 locations expected by 2011. Once activated, these divisions will bring our total location count in China to approximately 40,000.
We are further developing other Asian countries with promising long-term growth characteristics. Indonesia is a prime example, the country represents a top 20 inbound remittance market. During the third quarter, we had strong transaction growth in Indonesia and we launched our 10,000 agent location in the country.
We strongly believe Asia is a great long-term opportunity for us as it represents 20% of the global remittance market but only 8% of Western Union''s revenue.
The Philippines remains an important market although transaction growth moderated from the second quarter given the country''s connection to the Gulf states. As you are aware many parts of the Philippines have encountered devastating flooding brought by Tropical Storm Ketsana.
The Western Union Foundation and our regional operating center in the Philippines have begun a number of initiatives to assist in relief and reconstruction efforts. The Western Union Foundation is also contributing to emergency response to the hardships inflicted by disasters in Indonesia, Samoa and India.
Turning back to the business, globally we continue to focus on growing our core though a variety of channels including our intra-country transfers, westernunion.com and account-to-cash. Each of these channels represents less than 2% of existing company revenues but they are growing rapidly and offer significant opportunity.
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