Good afternoon, and welcome to The Western Union Third Quarter 2013 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mike Salop, Senior Vice President of Investor Relations. Please go ahead, sir.

Thank you, and good afternoon, everyone. On today's call, Hikmet Ersek, Western Union's President and Chief Executive Officer; and Scott Scheirman, Executive Vice President and Chief Financial Officer, will discuss the company's third quarter results and then we'll take your questions. The slides that accompany this call and webcast can be found at westernunion.com under the Investor Relations tab and will remain available after the call. Additional operational statistics have been provided in supplemental tables with our press release. Today's call is being recorded and our comments include forward-looking statements. Please refer to the cautionary language in the earnings release and in Western Union's filings with the Securities and Exchange Commission, including the 2012 Form 10-K, for additional information concerning factors that could cause actual results to differ materially from the forward-looking statements. During the call, we will discuss some items that do not conform to Generally Accepted Accounting Principles. We reconcile those items to the most comparable GAAP measures on our website, westernunion.com, under the Investor Relations section. All statements made by Western Union officers on this call are the property of the Western Union Company and subject to copyright protection. Other than the replay noted in our press release, Western Union has not authorized and disclaims responsibility for any recording, replay or distribution of any transcription of this call. I will now turn the call over to Hikmet Ersek.

Thank you, Mike, and good afternoon. As we enter 2013, we continue to implement our plans to make pricing and other investment and undertake efficiency initiatives to better position our business for the future. Our focus this year has been on strengthening consumer money transfer, increasing customer and usage in business-to-business and generating and deploying strong cash flow for our shareholders. As we have now completed 3 quarters of the year, I remain pleased with the progress we are making. The third quarter results provided some very positive signs that our strategies are working. In consumer money transfer, transaction growth accelerated to 9% or 10% for the Western Union brand, driven by our pricing actions and strong electronic channels growth. In Business Solutions, revenue increased 10% in constant currency terms, as we continue to execute well on expanding product offerings and increasing penetration. And in consumer bill payment, increased 9% constant currency, driven by South America and the U.S. electronic bill pay business. The consumer money transfer pricing actions continue to produce strong results in transactions and usage. In the corridors where pricing actions had been implemented prior to the beginning of the third quarter, transactions increased 20%, or 14% excluding digital. In comparison, we're seeing brand transactions in the non-priced corridors increased 6%. Mexico, in particular, demonstrated more progress in recapturing momentum. Overall transactions, including Vigo and Orlandi Valuta, increased 15% in the country, while Western Union-branded transaction increased even 24%. In the U.S., we are very pleased to increase our distribution through our new relationship with Walgreens. Walgreens is the largest drugstore chain in the country with over 8,000 locations and we will be adding our consumer money transfer and bill payment services there beginning in 2014 providing more choice and convenience for consumers. In Europe, we renewed…

Thank you, Hikmet. As mentioned, we are pleased with the progress we are making this year and we are affirming our full year financial outlook for 2013. Third quarter total consolidated revenue of $1.4 billion declined 1% compared to the prior-year period, primarily due to the previously implemented pricing investments in the C2C business. On a constant currency basis, revenue was flat in the quarter. Key drivers in the quarter included strong growth in our electronic channels and from both Business Solutions and consumer bill payments. In the Consumer-to-Consumer segment, revenue declined 2%, or 1% constant currency, as transaction growth was offset by the impact of previously implemented price reductions in certain corridors. Total transaction growth accelerated to 9% in the third quarter compared to 3% in the second quarter. Western Union-branded transactions increased 10% compared to 7% last quarter. The third quarter growth rate improvement compared to the second quarter was driven by continued acceleration from the pricing investments and increased growth in corridors where pricing investments were not made. Total company transaction growth is still being impacted by previous implemented compliance enhancements in some countries as we discussed earlier in the year. C2C cross-border principal increased 8% in the quarter and Western Union-branded cross-border principal increased 9%, with no impact from currency. Principal per transaction declined 1%. The spread between the C2C transaction growth and the revenue decline in the quarter was 11 percentage points, including a negative 1% impact from currency. For C2C, the impact of net price decreases was approximately 8% in the quarter, while mix had a negative impact of approximately 2%. Turning to the regions. All of the geographic regions delivered improved transaction growth rates relative to the second quarter. In the Europe and CIS region, C2C revenue decreased 2% year-over-year, including a positive…

[Operator Instructions] And our first question is from Tien-tsin Huang of JPMorgan. Tien-tsin Huang - JP Morgan Chase & Co, Research Division: I guess I want to ask just on the compliance side, just maybe the business impacts from some of these compliance procedures. I get the extra -- the spend that you alluded to here. But I know that influenced some of the agent loss in Mexico, perhaps last time. Can you comment on that broadly?

Sure. If you look at -- it has a beauty doing business in 200 countries but it has also its price. Environment is very fast, very evolving. We upgrade some of the point of sale actions, we do it. We do have realtime risk assessment on the point of sale. We do have high principal callback, customer callbacks on the point of sale. And we do also increasingly putting more measurements on the point of sale. So that has -- that may have some revenue impact and some customer behavior impact. But generally, what happens is that we did that in the past in a few other countries. Generally, the customer behavior then changed back again, the customer use us again. So I believe that the revenue impact will be somehow but not that much. I mean, more on the investment side for the long term, I believe, will benefit Western Union. Not on a short -- short term maybe a little bit, some revenue impact, but not long term. Tien-tsin Huang - JP Morgan Chase & Co, Research Division: Hikmet, I know you're very -- go ahead, sorry.

And I think it's important to note, even though there may be some impact to revenue because of compliance, in 2014, we still expect to grow revenues.

Absolutely, yes. Tien-tsin Huang - JP Morgan Chase & Co, Research Division: Understood. Understood. I mean, Hikmet, I know you're really close to the agents. You're always flying around meeting with them. What do you think their -- what's been their feedback with some of these compliance changes as they're going on?

Tien-tsin, as you know, 75% of our network are banks and financial institutions. So they live with that day to day. They know it, how it works. And they will implement that, which is good obviously. They also -- that's why they choose us because we have high standards on compliance, the banks. And it's nothing new on the financial institution area, on the compliance changing environment. I mean, we are not alone here, right? So the industry, totally, are investing a lot, millions of, billions of dollars. Our agents do that. So I think it's not something new to them. However, some independent agents could be having some new procedures. We have to implement, we have to take them to the -- some compliance trainings. And some nonperforming and noncomplying agents, we do close them, like we did it a year ago with 7,000 locations in the Southwest border area. However, generally, I would say that 75% of our agents are financial institutions, they live with that. Tien-tsin Huang - JP Morgan Chase & Co, Research Division: Yes. That's helpful. I totally appreciate the compliance stuff. Last one, I promise. Just a -- Scott, you said U.S. cash, did you give how much of that was at the end of the quarter?

Yes, there's about 50% of that is U.S. cash, about 50% is international.

And the next question is from Ashwin Shirvaikar of Citibank.

I guess my question is with regards to the compliance costs. Is this a sort of a compliance costs surge, so to speak, for a year? Or is this a new normal?

Well, if you look at the compliance cost, Ashwin, this year, it's about 2.5% of our revenue. And at this time -- and we are looking at that with our compliance and this is so fast-changing, the environment. It's -- at this time, we are seeing about 3.5% to 4.5% of our revenue as an investment for 2014. And that investment will upgrade our compliance procedures. And the part of that is more resource, part of that is technology, investing on the technology. Obviously, as we speak, my team and I am working very close to find to optimize the procedure, look the best investment to upgrade our compliance environment. And so you can take next year about 3.5% to 4.5% of our revenue as an investment for '14. Right, Scott? That's the number.

Yes. And we'll continue to look for ways to optimize those costs, but those are generally infrastructure-type costs with people and technology and so forth. But over time, we'll look to optimize those costs. But it's important to us to have very strong compliance programs and that's what we're striving for.

Yes. And over time, also, I believe that we will optimize them, Ashwin, because think about our span, our global reach, I think we do have quite good operation efficiency. Don't forget about 35% of our costs are fixed and 65% are variable. I believe that that's -- that will be more optimized. But we have to do these investments now.

And is the bulk of this compliance cost still focused in the U.S.? Which countries are the primary focus here?

Well, if you look at that, it's a global investment. It's not only U.S., right? So I mean, as I mentioned earlier, we did some investment -- new change requirements in U.K., Spain. We have some changes in European Union. We work with the Turk monitor in the Southwest Border area in the U.S. and U.S. is also part of it. We do -- we just expanded on a short-term also our Southwest Border agreement because of the passing of the Attorney General, which happened recently. So I think all this changing environment globally, it's a global trend, which is happening and very fast-growing. And I said to you before, it's nice to be in 200 countries. It's very good. It helps you as it grows. But it has also its price to be in 200 countries and the very change, fast-growing environment.

Great. My last question with regards to the buyback, which I don't fully understand the comment around minimal buyback because you are generating cash. You said 50% of the cash is in the U.S. So could you put a number on that? When you say minimal, what is minimal? Is it a couple hundred million dollars? Is it almost...

Yes, it's early in the planning process right now. So it's going to be much less than the $400 million that we're targeting for this year. And probably -- an important point is that 75% of our cash flows, roughly our $1 billion cash flows, are international cash flows. And then we also have a goal to keep our desired investment-grade credit rating. So with all those things, it does provide some limitations for 2014 with buyback. But there could be some modest debt capacity there, too.

But one thing I just want to say also, Scott and I are constantly talking and looking at the opportunities, how we optimize our cash flow to -- for the shareholders, and we are constantly talking to the board about that.

And the next question is from Darrin Peller of Barclays.

Listen, would you mind starting off just for the recent traction we've been seeing in the pricing? And then obviously, flowing through over the next couple of quarters, I mean, should we continue to see an acceleration there? I know that the focus right now of investors is obviously on '14, the cost for compliance. But just curious how much of a top line strength we can expect to see given the pricing changes you've already made? And then what maybe we should be thinking about going forward in terms of additional price action, if there's even any necessary?

So I think -- Darrin, hi. I think generally, I'm very pleased with our C2C transaction growth. As you know, as I mentioned earlier, it was the strongest quarter we had the last 3 years. So we -- the team and I are very proud of that. And the pricing actions indeed are working on the field. We have -- I mean, our Western Union-branded transaction in Mexico, just to give an example, are going by 24%. And with Vigo and Orlandi Valuta, together we are, in Mexico, going 14%. And transaction growth is, on the price corridor totally is, Scott, about...

20%.

20%. So it's really working. And the good news is, also, pricing is not all about it, Darrin. We are growing by 6% in the non-priced corridors. As you recall, we did about 25%, 75% of our business growth. So long term, I believe it's not all about price. We are very well positioned. We have a good brand. The agents are motivated about that. I don't see any big corrections we did like due to some compliance Mexico issues last year. I believe that we are very well positioned and it's all the package. It's not only pricing what we are doing...

Okay. That's good. So with regard -- I mean, you're seeing a lot of good traction on the price changes. Does that mean that some of the restructuring charges put aside -- again, put aside the compliance side, but the restructuring charges you put into effect this year, I guess we were wondering if you're going to see similar levels next year. Or is that going to sort of lighten up?

Well, Darrin, I'd say it's too early to talk about specifics about 2014. We do expect to grow the revenue. We are looking hard at all of our costs to optimize them and so forth. So we're very focused on that. But the cost savings initiatives we undertook this year, we do expect to see those benefits in 2014.

Yes, I think if you, Darrin, being very frank and open here, if you put the compliance cost investment to side, we would have grown those profit growth, right? I mean, we -- don't forget, it's a very profitable company. I mean, we have -- compared with the competition and everything, we have really good margins. But that investment is needed. We are going to do that. And from today's point of view, we are looking for profit -- nonprofit growth. But we are very focused to optimize that and we will give you more color when we talk about in February, right?

Just this last question for me on the electronic channels. I mean, the transaction growth is still 68%. So I mean, in terms of investment dollars being made there, obviously, that was a big effort for you guys and it's obviously showing some big transaction numbers. Should we expect similar growth rate there, I mean, as some of the pricing initiatives had -- are starting to really kick in, as well as the strategic and marketing initiatives around that, is that -- should that continue? It's now 5%, I think, you said of your revenues in terms of electronic transactions now?

You talk about revenues, Darrin?

Yes, I was saying that the electronic channels now have gotten to about 5%, which, obviously, is a pretty significant step up.

Right. So no, I think -- I'm very pleased with the electronic channel. One of the big batch we did, as you know, 18 months, 20 months ago, we opened our San Francisco office. westernunion.com is growing, 68%, even the U.S.-generated transactions are going over 70%. And so U.S. is growing. The European Union transactions, I'm very pleased. And the other thing I'm very pleased, also, are the electronic account-based money transfer. Like, you go to your bank account and you send money electronically. That's going by 55%. So it's 5% of our revenue. And as you know, in westernunion.com, we have a road map for 2015 approximately being about $500 million revenue. And so I think that the team and I am pleased with that progress. And I have to say that's compliments to the San Francisco team.

And our next question will come from Tim Willi of Wells Fargo.

Just a couple of questions, one on the compliance and one on sort of the '14. So as you grow the business-to-business, is there anything you're dealing with compliance right now that is addressing that operation? Is it a very different compliance environment? Just want to make sure that as that grows, that the experience you're having right now of compliance around consumer isn't something that necessarily will be repeated by the business-to-business as that becomes a larger division in the years to come.

I think if you look at, Tim, on our business, generally, we're seeing obviously every transaction cross-border and also intra-money transfer, we are very complied with the regulators. It's a very changing and fast-changing part. And business-to-business is a part of our business, which are also on the compliance umbrella. However, different business environment has different procedures. At the business-to-business, you open an account, you register and on the both sides. So we have different know-your-customer environment on the business-to-business than on the retail money transfer. On the account money transfer like electronic money transfer on westernunion.com or account-based money transfer, we have different procedure like we have in the retail money transfer business. So it's different -- on the operation side, it's different procedure. But I would say, overall, we are all under one umbrella on the Western Union compliance programs. And that's why we also invest in the compliance programs in the B2B.

Yes. And Tim, this is part of the increase for 2014. So Business Solutions is listed in that. And as we mentioned last time, Business Solutions is part of the Southwest Border agreement now as well.

Yes, it's not an extra investment there needed.

Okay. And then just 2 other real quick ones. Scott, regarding the comments about operating profit for '14, I just want to make sure I understand the semantics of that, GAAP basis to GAAP basis like '13 GAAP to '14 GAAP, basically you're looking for flat?

Yes, the comment -- it is a GAAP basis and our comments were that we don't expect operating profit to grow in 2014. Again, it is preliminary. We're working through the budgeting process. But with the increased compliance costs and some of the impact that may have on the revenue, we don't see operating profits growing in 2014.

Okay. And then my last one and I'll hop off. Just going back to westernunion.com, I know you guys have been working to enhance, I think, the ACH funding capabilities versus currently, I think you're a lot of credit and debit card. Just sort of curious if you could give us an update where you're at around those efforts and what that might mean in terms of the profitability enhancements or a westernunion.com as a stand-alone?

As you know, at the westernunion.com, we are in 23 countries now. I think we are expanding and I'm very -- we will expand in more countries even within the next few months. So I'm very, very optimistic. It depends on the ACH where -- which country you are and where you are. In the U.S., we do have today on the credit card. And on ACH, also we do ACH. And for instance, in India, we do have ACH. It drops 3, 4 days later on the account of the Indian account. We do have direct debit in Germany. We have direct debit in Austria. We have direct debit in France. We do have this kind of direct debit as a kind of ACH where we have it in Europe [indiscernible] and EPS payment in Europe. So it depends really on the customer choice. And I see that the customers are using credit card or direct-to-bank. That's really their choice.

And the next question is from Sara Gubins of Merrill Lynch.

This is David Chu for Sara Gubins. Just wondering, amongst -- so you noted that you closed noncompliance agents. The agent base was down 5,000 sequentially. Was that -- to account for this, was there compliance issues at these agents?

No, I would say generally, I'm very pleased with our agents new acquisitions and expansion. Don't forget, we just signed Walgreens. La Banque Postale, additional 13 -- additional 3,000 locations in France. So additional, we are -- I'm very pleased. And we are very focused on the productive locations. The closures, we do that every year. The closure of the nonproductive location is a part of our business. We do not -- we go and close the nonproductive locations, right? And we are very focused on the productive locations. And could be also part -- some parts of them are not complying with our systems. But I would not see that as a majority of our closure. It's more about nonproductive locations that we close.

Yes, most of the reductions we did in the quarter were really dormant locations in India and Europe. Some of those may have been related to compliance needs, but they're almost all dormant locations.

Yes, they are dormant.

Okay. That's helpful. And so your trends have improved nicely and competitors have seen strong trends as well. I mean, is there anything you can point to you from a macro or secular perspective that possibly is increasing demand here?

Well, I think I'm very pleased, general overall transaction growth. I'm not sure if everyone is so pleased that I am pleased overall in global if you're in 200 countries. I think -- let me get Mexico, I believe the question on the Mexico. We did have better transaction growth than the Mexico -- Banco de Mexico that announced and I think I'm pleased with our Mexico business here. But I will say that generally, there has been some in Europe, some better environment, global economic environment. Our business in Europe, Italy has been improving. In Southern Europe, Spain, I see improvement. And I do see our Germany and France and U.K. businesses always been good and supporting our part. Asia has been performing well, Scott, right?

Yes.

And what else? I think also Africa, Middle East are delivering good numbers. Generally, there is a more positive environment 3 quarters, 2, 3 quarters ago. Now it's -- I see a better economic environment. And also, agents are telling us that.

Yes, I'd just add that the team is executing well. So when you look at each of the regions, third quarter compared to second quarter, had better transaction growth. The things that we've done to improve the consumer value proposition, those transactions grew 20% in the Western Union price corridors. But even the corregidors where we're not doing pricing were up 6%. And we talked a lot on this call about digital and account-based money transfer, but it's all those things that we're putting together to give the consumer choice and convenience. And the team is just executing well in the field.

And the next question is from Bryan Keane of Deutsche Bank.

Just more questions about the compliance cost. Did competitors have these additional compliance costs as well?

Well, I can't make comment on the competitors. But we believe that's industry standard, what we are setting here, and we are really following the regulatory requirements. And we are looking at our compliance environment and we are investing on that. As a market leader, I assume that, that will be industry standard. We are not doing more than the -- I don't think that long term, we will do additional -- we serve the customer, we serve the shareholder. I think that's all about protecting the customer, Bryan. I mean, I believe that setting the industry standard, some others will also have the same standards.

Well, I assume there's -- you're creating a mode around the business because it's going to cost significant amount of money to transfer money internationally if you have to put this kind of money into compliance. Or is this just specific to Western Union?

It's not specific to Western Union, Bryan. I think it's the general environment. As you know, we operate in 16,000 corridors. Every corridors, every country has their own dynamics. I believe that we really look at -- that it's about -- it was 2.5% of our revenue. Now it's going to be about 3.5% to 4.5%. I'm really looking that we have the right investment, right environment to comply with the rules. And I believe it's going to be competitive advantage long-term for Western Union and we are doing the right thing here.

How much of the 2.5% -- or 3.5% to 4.5% of the revenue in 2014 is a onetime investment? Because it sounds like there's some onetime investments to upgrade the systems?

It's too early to say, Scott, right? I mean, that's -- as we speak and why we're changing so fast, Bryan, as we speak these numbers, we are really looking at the numbers. We are -- it's too early to tell about that. But I believe a part of it is onetime, right, Scott?

Bryan, that's where we're digging through right now. So some of that could be onetime. There could be some opportunities through automation. But a fair amount of it, too, is infrastructure. But as Hikmet mentioned, it's preliminary and we're working through that. But our goal is to really meet the regulatory requirements. And we do believe, as the market leader, these will and are becoming industry standards that we believe everybody is going to abide by.

We had calculated about $80 million of op income improvement from less integration and cost saving benefits into fiscal year '14. Why doesn't that offset these incremental additional costs, or they do? Because then the question is, if you're going to get revenue growth, as you guys always say, profit growth -- higher revenue growth will lead to higher profit growth?

Yes, first, I'd say, Bryan, it's early in the process. We're working through our budgeting and we'll give you more color in February. But just to add a few comments there that as we think about revenue, we do expect revenue to grow in 2014. We also believe the compliance initiatives will have some impact on our customers and revenue from that standpoint. And then we've also talked throughout the year about increased agent commissions. So we do believe our agent commissions will continue to increase on a near-term basis. That's improved our competitive positions in certain markets for sure. Longer term, we see opportunities to optimize our distribution costs. And then clearly, we are making some investments in Dot.com, in IT. Especially Dot.com, we think it's really the right thing because, as Hikmet mentioned earlier on the call, this we suspect and we believe will be a $0.5 billion business by 2015. So we will give you more color in February as we move forward.

But Bryan, look, it's early to tell. And we are looking at, I think, the same calculation, we do also have it. I think you are -- and we are looking at that to optimize our costs and investments here.

Yes, just seems like you have some onetime integration costs plus cost saves benefits, which can offset these additional costs. So and if you do get any revenue growth, it just feels like there should be some profit growth.

And our next question comes from James Friedman of SIG.

Also on the compliance costs. I was just wondering, are those compliance costs uniform across the organization? For example, do you notice better compliance aptitude for wu.com than for the physical point of sale?

I think the compliance costs are, overall, the same in some westernunion.com. We do have some advantages where you register -- to register the customer, know your customer, procedure is easier. If I understand your question right, in some retail money transfer, we need additional point of sale requirements at that moment, ask for additional information. I think it's the know-your-customer and know-your-agent requirements from the regulatory is getting high, more and more. That's why we are investing. But generally, I would say once the customer is registered, know-your-customer procedure is done and we know the customer and the regulators are asking us different way of questions and procedures than we are doing today.

Okay. There were some increased compliance requirements from the CFPB, the Consumer Finance Protection Bureau, announced this morning. Were those a subset of what it is that you're talking about relative to your plans for next year?

I think -- I don't know. I'm not aware about that. I have to look at that what you're mentioning now. But I have to say that from CFPB announced remittance rules, our Dodd-Frank rules is more transparency of the consumers; that on the forms, we put more information and we disclose more foreign exchange rates and fees to the consumers. And we do that. And I have to say that I'm very proud of my team and we did that in 50,000 locations on time. And I believe that's the thing you're -- I don't know if you are talking about that, but I'm not aware about new rules announced this morning from CFPB. I have to come back to you on that.

Yes, no, I think that, that was it, Hikmet. Last one for me. And I apologize, I think that you had addressed this earlier, it's more of a housekeeping question. But you did have a 5,000 estimate reduction. What was that due to in terms of franchisees sequentially in the quarter?

No, year-over-year, we do that, look at our location count. And we do have a closure and cleanup. And we did close 5,000 locations, which were dormant, right? I mean, we are about 500,000 locations. We have about 515,000 locations, 115,000 ATMs. So almost 650,000 touch point. But these are the cleanup, we do it. But I don't see any big changes on our expansion on locations.

And the next question is from Tom McCrohan of Janney.

Sorry to beat a dead horse on compliance. How much of this is related to the remittance transfer rules? That came out of Dodd-Frank. That's not part of the CFPB. Do you have a majority of what the spending is all about?

Sure. I can tell you -- I mean, the general spending is mainly in the U.S. and on upgrading the point of sale in the European Union with the new rules. We have it in the European Union and which has been -- it's part of it is also been announced earlier, which we are going to implement in '14, right? So I think that the rule -- all over the -- if you are acting in 200 countries, you do have -- I speak to the regulators in Russia, I speak to the regulators in Morocco, I speak to the regulators in Brazil or in the U.S. So it's generally all over, an upgrade of regulatory environment. And very fast-changing regulatory environment actually. And many regulators, we have to implement that.

Yes, the U.S. remittance money transfer rules, they've been implemented. So we have a deadline of, actually, Monday of this week. So that's in place now. So in terms of the increment in cost next year, not a lot is necessarily coming from that. But as Hikmet said, it's really coming from a lot of different things that we're doing around know-your-customer and know-your-agent around the world in Europe and the U.S., part of the Southwest Border, Asia as well.

It's not one particular regulator that's driving you? That's a whole bunch of...

No, no, it's a variety of things.

It's the European Union, it's the U.S., it's the Latin American -- that's the -- as I said, there's beauty to be in 200 countries, but there's also some investment, price to do business in 200 countries. That's a part of it.

So barriers to entry is going up. It's getting more difficult to compete in this business unless you have a real long-term commitment. That's good for you guys, but there's no profit growth next year. And I guess people just want to know what the long-term earnings power is. And when you come out of this at the other end, what should people be thinking about in terms of long-term sustainable transaction growth and market share gains? If you can talk about that, that will be helpful.

Sure. Well, first of all, I'm going to give more color in February about '14. But I -- good news is that we have a momentum, right? I mean, we have a momentum. The transactions growth are good. The revenue growth is coming. And I think I feel comfortable despite all these investments and despite all these changing environment, we do generate revenue growth next year. And obviously, also transaction growth. So I believe that we have the right fundamentals. Then the other thing is that electronic channels are growing very fast. I think our retail money transfer business is doing well. I think the compliance thing is here. It's a part of doing business. But it doesn't apply on us. It applies on others. The other thing I may also -- if you look at Mexico, for instance, our Mexico business is doing well. The part of it is that we're capturing market share from some banks who are not doing this business anymore and we are capturing. So I think we have room to grow this business in the environment which is complex. And I see compliance as a competitive advantage and a competence for us to capture market share from financial institutions they can't invest -- they don't want to do this business anymore.

So last question, this is just -- it's just that I feel intuitive that -- when it feels intuitive is that the barriers to entry going up and it's costing a lot more to be in this game, to transfer money around. There seems like every week we read about a new company that's offering a P2P service. Square just came out with a service as well. So how are you thinking about the threats from these emerging players? Are they -- how are they going to -- just how you're thinking about these emerging players that keep showing up in the press and that I think all of us are getting questions on?

Well, the last 3 years since I've been CEO, that was more press releases than real revenue-generating. I would say there are always press releases. But I -- in the cross-border, we use our competency. I have not seen a big movement on that. It's a complex business. You have to build it. You have to invest in the regulatory environment. You have to build the customer trust. You have to cross the currency. You have to settle in 123 currencies. You have to get this risk management with agents. You have to buy 500,000 locations. It's a complex business. I did not see any movements from competition there. The announcements I have seen so far was more on the intra-money transfer business, was more of press releases than real revenue-generating activities.

Yes, I think you also see a lot of dollar limitations on some of these products as well. So they're small dollar transfers in many cases. They put limitations around their own business.

And the next question will come from David Togut of Evercore Partners.

This is Rayna Kumar for David Togut. Looking at your C2C revenue growth and transaction growth for the quarter, that implies pricing was down 10%. That was a larger cut than we were expecting for the third quarter given that most of your pricing cuts had been taken by the second quarter. So could you just discuss your pricing actions for the third quarter and then give us a preliminary view of your 2014 pricing strategy?

Yes, for the third quarter, that was the first quarter that all of our pricing actions were put in place, if you will, so a full quarter impact of that. And what we did see was 10% transaction growth on the brand. Now mix had about a 2% impact as we move forward. As we think longer term about pricing is that in 2013, we did some significant pricing investments in certain corridors. Some of these were onetime resets. We don't expect to see that in '14 as we move forward. And I think it's also important to note, if you look at the third quarter, our cross-border principal on -- for the Western Union brand grew 9%. So that's a nice growth rate. Again, you can't look at it on a quarter-by-quarter basis. But when you look at IAD (sic) [IDA] or the World Bank, they're projecting growth rates of 6% kind of on a full-year basis. But it speaks to that we are in a healthy industry and we're doing the right things to got ourselves very well positioned in a healthy industry.

And the next question will come from Jason Kupferberg of Jefferies.

I think you disclosed you had $4 million in Travelex integration expenses in the quarter, but I might have missed how much restructuring in terms of the cost savings restructuring that you booked in the quarter. And I wanted to see if the full year totals of $20 million on the Travelex side and $45 million on the cost takeout side are still valid.

Yes, in simple terms that we're projecting will be about $20 million of Travelex integration. And then on the other cost-savings initiative, for the quarter, that was about $6 million. And we think for the full year will be somewhere between spending $40 million to $45 million, which is broadly consistent with what we've talked about in prior quarters, Jason.

Okay. So that's a pretty big step up in Q4, right?

Yes.

Yes.

Okay. And then I guess if operating profit isn't going to increase next year, there's no reason to assume EPS will either, I suppose, just given that you indicated buybacks will be relatively minimal next year. Is there anything else in there that we'd be missing?

Yes, the only color I would give you is it's early. And broadly, EPS will probably broadly track with not having -- likely, we don't expect to have operating profit growth. So the operating profit will probably move in tandem with EPS, or EPS in tandem with operating profit, just from a big picture standpoint. But it is early.

And then just lastly, to finish the discussion on compliance. I mean, it sounds like what you guys are saying if you kind of roll up all this commentary is that it's, essentially, going to cost you more than you previously thought to comply with regulations that you already knew about. I mean, is that a fair way to kind of summarize it as opposed to new regulations having just popped up in the last couple of months since the last earnings call that you're all of a sudden reacting to? I mean, is that fair?

No -- well, I would say that there is no question that this has been always in our target. We recently hired the Chief Compliance Officer. He brought a very experienced team. We look at our programs and some parts of that are coming new. It's sudden changes. Some parts of that, we have to implement the rules that we have it in place. So I think it's a mixture of all and that requires additional investment about 1% that we did it in 2013. So but it's still too early. It's still we are looking at it. We are optimizing at that. And it is that we have to do it. It has been -- we were thinking about 2.5%, 3.5%. Now it's about, looking at the programs and fast-changing thing, it's about 3.5% to 4.5% investment we are thinking about. So it's something that we are looking at very carefully.

Yes. And just a lot of these things are not necessarily black and white. They haven't been historically. So when we work with regulators around the world and around the states and you get clarification on what's needed and make agreement on what programs you'll do, these things are kind of fluid. And so some of these are interpretations of older rules. Some of these are new things. Some of these are just clarifications with the regulators. Some of them are our own review. So there's a lot of different things going in here. Well, thanks, everyone, for joining us, and have a good afternoon.

Thank you. Bye.

This conference is now concluded. Thank you for attending today's presentation.