Good afternoon and welcome to the Western Union Third Quarter 2015 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, Laura. On today's call Hikmet Ersek, Western Union's President and Chief Executive Officer, and Raj Agrawal, Executive Vice President and Chief Financial Officer will discuss the Company's third quarter results, and then we will 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 2014 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've reconciled those items to most comparable GAAP measures on our website, westernunion.com, under the Investor Relations section. All statements made Western Union officers on this call are 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 responsibly for any recording, replay, or distribution of any transcription of this call. I would now like to turn the call over to Hikmet Ersek.

Thank you, Mike, and good afternoon everyone. We delivered another good quarter, especially considering the challenging environment in many parts of the world. In constant currency terms, all three of our business segments produced good revenue growth. westernunion.com and the U.S. outbound market continued to provide good growth in consumer money transfer, offsetting economic softness from Russia and the impact of market restrictions in Greece. Net pricing in the quarter was minimal. We continue to believe the environment remains stable, and we do not anticipate significant changes in pricing in the near future. Our retail commission rates have also been running slightly lower than a year ago, and we expect those to remain fairly stable, as well. Consumer bill payments growth in the quarter was again driven by Argentina and the U.S. electronic bill pay and business solutions constant currency revenue also increased, despite global trade weakness. Our margins were strong. Operating margins were consistent with last year's third quarter at 21.8%, while EBITDA margins increased 70 basis points. And we continued to generate strong cash flow and distributed to our shareholders with over $200 million returned through dividends and share repurchases in the quarter. Year to date through September, we have now returned $670 million to shareholders. There are some micro challenges. With uncertainty about global economic growth and trade, and geopolitical tension in many parts of the world, but we are confident in our execution and the resilience of our business, and we are pleased to affirm the full-year financial outlook we provided last quarter. We're also excited about the future opportunities, and we continue to make progress on our strategy growth priorities. I have spoken to you in the past about how we plan to expand our cross-border network into new areas in the future, providing more…

Thank you, Hikmet. Third-quarter revenue of $1.4 billion was down 3%, compared to the prior-year period, due to the impact of the stronger U.S. dollar, but revenue on a constant currency basis increased 3%. The impact of currency translation net of hedge benefits reduced third-quarter revenue by approximately $85 million compared to the prior-year period. In the consumer to consumer segment, reported revenue decreased 3%, but increased 3% constant currency. Transactions grew 2% in the quarter. Business trends were generally similar to the second quarter, but transaction growth rates came down slightly, due to the impacts from the Philippines and Greece. The Philippines was impacted by reductions in new intra-country business, banned by compliance-related actions. The Greece decline was caused by government-imposed restrictions on money transfers, which have now largely been lifted, so business in the country is improving in the fourth quarter. In the quarter, total C2C cross-border principal declined 6% or increased 1% constant currency. Principal per transaction was down 7% compared to the prior-year period as a result of foreign exchange translation, and was flat in constant currency terms. The spread between the C2C transaction growth and the revenue decline in the quarter was approximately 5 percentage points. The differential was due to a negative 6% impact of from currency. Mix had a positive impact of approximately 1% in the quarter, while the net impact from pricing was minimal. Turning to the regions, due to the significant fluctuation in foreign exchange rates compared to last year, as I discuss individual country contributions to the regional results, I will be referring to constant currency movements. In the Europe and CIS region, revenue declined 10%, but was flat constant currency basis. Transactions declined 3%. Strong revenue growth in Germany was offset by continued weakness in Russia, and the previously-mentioned…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question will come from Darrin Peller of Barclays.

Thanks guys. Just want to start off with the competitive dynamics and pricing for a moment. Hikmet, you mentioned, so far it looks like stability is what you're seeing across pricing. Can you just comment on really little more granularity on that by region, and if there's any regions that stand out versus others? Domestic obviously was a big area of concern. There's been a lot of innovation around domestic. Are you seeing any more of that, or is it still stable?

I think generally I don't anticipate big changes on pricing in the near future, as I mentioned earlier. I think the market is quite stable, even though it's in the domestic we are really improving our transactions. Even in the priced places where we put pricing, but also in the non priced corridors in the domestic, in the cities, we are really improving our transactions here. That's a good news. The market is stable. As, our pricing is different from channel-to-channel, corridor-by-corridor. We are operating in 16,000 corridors. We have different channels, we do different pricing. That is a bit of our business, but overall, I feel quite comfortable with our pricing strategy.

I would just add that the transaction growth that we see this year is more result of global economic conditions around us. We have seen some positive growth in areas, but we also have some markets like the Philippines and Greece and other markets that are --

Greece was closed last quarter.

That are having an impact, but that's some of the impact you're seeing in transaction growth.

That is helpful. I want to hit on just the overall channel for growth online. It continues to be very strong, despite being off obviously an increasing base. And in terms of just the acquisition, the customer acquisition patterns vary. Do you have enough channels to keep going at this rate for a while? It's a big market, but without cannibalizing your core business, which you continuously say is not happening, is there enough out there and enough channels? And on that note, we've heard of some of your other competitors buying assets like XE out there, that are enabling unique customer acquisition channels. If you could just comment on your strategy around that to enable that to continue to grow with these trends? And on the margin part of that, just given that your margins are holding up pretty well, as the margins been coming up in that area versus where they were, given the scale on that?

Let me start with the overall digital performance. I would say that westernunion.com is doing pretty well, as you know that our transactions are growing. Even in the U.S. where we have been longer in the market, we have been 32% transaction growth last quarter, so very strong growth. But we’re also expanding to the new countries. So the growth will continue to come in the new countries. We are in 33 countries now, and these countries are just on the start on the westernunion.com site, which is Western Union branded, but also non-branded like account-based money transfer, transaction, online transactions, bank-based transactions growing very well. So are pleased with our online trends. Darrin, you're absolutely right these are new customer segments, still new customer segments. They didn't use the Western Union on the retail the last 12 months, so it is 80% the, there is a little cannibalization if you name it as cannibalization. I am pleased with the strategy. So what we did also with our new Western Union Connect is that opening our platform, which is a unique platform as you know with compliance with regulatory license in 200 countries with multi currency settlement, it paying out in 131 currencies, we are opening our platform to new digital players also. I think that in the near future, you will see some partners here, new digital partners, we are working hard on that to announce, but our WU Connect platform is really the capability to move money globally, not only to a retail, but also to an account, to a mobile wallet or to any type of electronic way, to a mobile wallet in a way that not many companies can do that. On the margin side, I just want to add was that the margins are improving here, also on the digital side, but we're still investing here. We're going to continue to invest. Raj, do you want to add on the margin side?

Margins were strong overall in the Company, probably in this quarter, WU.com itself was not a big contributor, but we see better margins in that business over the next few years because as we get the leverage in the marketing and technology spend that we're doing, and as we have additional funding vehicles from a bank account and paying out to a bank account we should be able to drive better margins in that business. Right now, the focus has really been on driving top line growth and expanding the distribution. But it is going to be a bigger margin contributor over time.

Last question, and I'll turn it back, the margin side overall, as you have said it has been pretty stable, and pretty strong this year versus some expectations before the year. Are there any variables you see outstanding that in front of you in the next few quarters that could derail that, or does the margin look like it should hold up, other than maybe FX hedges?

The FX hedges as you say, is going to be where we'll have less of a gain next year, assuming rates stay where they are. The part we don't know about currency is the overall currency translation impact. But the other factors that will impact margins are obviously overall revenue growth, and in our commission line, this year, as Hikmet mentioned in his comments, we have been able to bring commission costs down a little bit this year, and we're getting some beneficial mix impact. Compliance costs have been more stable this year then we see them being more stable in the 3.5% to 4% range, that has been a drag historically. We don't think it will be as much of a drag as we look forward. We also are looking for also opportunities to reduce our costs in our fixed and variable cost. Those are some of the factors that will impact margins overall.

We are going to continue to invest in the growth areas like digital and the technology. That we will continue to do but the improvement of the margins are quite promising, and overall stable.

The next question comes from Sara Gubins of Bank of America Merrill Lynch.

In Asia, we've seen the transaction trends declining a bit more, and you talked about it weakening, is there any -- are there any other particular issues that are worth mentioning, just to explain what the worsening trend is coming from?

It's a really geopolitical issues, economic issues, we don't see major issues here, Sara.

In the Philippines we put some new compliance rules in place earlier this year, and that has continued to impact the intra-business in that market, which is a bigger impact to transaction than it is to revenue overall. Greece was closed for a lot of the quarter, even though it's a small portion of our revenues, it does have an impact. Greece is coming back to more normal levels, so that should help us in the fourth quarter. But those are couple of the reasons that transactions were down a little bit from the prior quarter.

But the market is stable, we don't see any pricing pressure on that, so that we would lose transactions or something like that. In many general corridors, we are pleased with the transaction growth.

And then within the U.S. and online, can you update us on where you are in terms of doing immediate send? And is that something that is still an area of focus?

If you talking about instant funding in the US?

Yes, meaning from WU.com --

No real change from what we said before. We do have instant funding capability. We do evaluate all customers who want to do a bank funded transaction in the US for instant funding, but as I've also said in the past, we're creating a global business and it's not just a US concept that we're trying to build out. We have bank funding and instant bank funding in many parts of Europe and other parts of the business, and that's really what we're trying to do is provide services all over the world, not just in the US.

Okay. Thank you.

The next question comes from Tien-tsin Huang of JPMorgan.

Good. Thank you, good afternoon. Just I want to ask about Western Union Connect, which looks interesting here. Just curious that the partner pipeline. At this point, what level of interest are you getting, Hikmet? And I get that it's going to take time to scale obviously, but I'm curious, are you going after big partners to scale quickly? Or should we consider more local partners to build it out?

As bigger as better, I would love to get big partners. Obviously, we're working on many partners globally. The good thing is that WU Connect, it's not like I was sitting in a corner office and came up with the idea. The idea came up from the market, and there are some partners who want like social media partners or some while the customer communicates with different parts of the world, they want to do all the other things like sending money or sending a gift, or something like that. This has been definitely something that we've been seeing in the market. The capability we have is unique, though. Having license in 200 countries and having that engine in the middle, having the compliance programs and the right time to invest as we started two or three years ago investing in our compliance programs, making a global compliance programs, and also the multi-settlement program is unique. Not many people can do that. So opening that platform to new partners is definitely something, we are working on it. It will take some time, though. It's a total new customer segment. It's building trust. It's building brands. It's a long term opportunity but I'm quite excited about that.

That sounds interesting. It makes sense that there'd be some natural demand there. I guess, just shifting gears as my follow up, the liquidity or cash question. I suppose US cash, or $200 million or so at this point, does this impact your ability to continue buying back stock? Should we think you'll reload on the debt front to replenish there?

No real impact. We had $1.4 billion, and as you mentioned, we did pay down a debt maturity, but we have plenty of cash. We still have some debt capacity to the extent that we need it. We have another debt maturity in the fourth quarter which we'll likely refinance with commercial paper and maybe some cash as well. But we still have our intercompany working capital programs that also help us to bolster our US cash balance. So we have plenty of opportunities there.

We typically repatriate some foreign earnings yearly, right? Around $200 million to $300 million. I think these programs are going away and we don't see any hiccups there.

Okay. That is great. Thank you.

And next we have a question from Bryan Keane of Deutsche Bank.

Just looking at the Latin American market, I noticed in the second quarter, transactions were at 7% and revenue in constant currency was 13%. This quarter, they were a little bit tighter together with transactions at 7% and constant currency at 8%. Just trying to make sure I understand what drove the differences between the second and third quarter there.

It's mostly from the grow over from last year. Last year, we had strong growth in the Argentina business, we had done some pricing in the business. So you're seeing a grow over impact on that, and that's really what's impacting the growth there. We've got transactions more in line with overall revenue growth there.

And the pricing actions that you guys did two years ago, are you still seeing an impact in the transaction growth rates from that, are those all anniversaried, and it's pretty steady state on the transactions, where you would be on the normal cycle for Western Union?

You're talking about overall or for Argentina?

Overall.

Yes I think it's a pretty steady state. This year we're really being impacted more from the conditions that we see around the world, more than anything related to pricing. So it's really that we're seeing in the transaction growth levels.

Okay and Hikmet, any thoughts about giving a long term constant currency revenue growth and EPS growth, just so people can plan a little bit and expect for the model?

Definitely not on this call. We want to give we will definitely give some outlook mix in February, around February for 2016. Obviously we can give also our strategy, long term strategy. We will have some strategy updates in our investors call obviously. But currently, I'm not going to give any long term guidance in this call, Bryan.

Maybe think about it for next

Maybe think about it for next quarter. It would just help investors understand what to think on a longer-term basis. Obviously if you pulled out the economic volatility, if you to stay in a status quo, in an economic environment, you can expect this kind of revenue and EPS growth, I think it would help people get some confidence in what the long-term outlook is for the business model, so maybe give it some thought.

Good suggestion, Bryan, thanks. I will have a look.

And next we've a quarter from Jason Kupferberg of Jefferies.

I was just curious, based on where you're at year-to-date, do you feel like the higher end of the EPS guidance is more likely? I think if you need, just to get to the midpoint it looks for EPS, I think you only need to do about $0.39 in Q4 versus the $0.45 you just predicted. I just wanted to test how you're feeling within the range with just a couple of months to go here?

Jason, I would just say that we raised our outlook in July because we saw more positive trends in the business, and that's really what we're just reiterating right now. We're positive on the outlook, and we feel good about the year.

Okay. But is there anything we should be thinking about as far as quarter-over-quarter declines in the P&L from Q3 into Q4?

There are some things that could impact margins, but our margin outlook is for 21%, that’s about where we are year-to-date. We know that the hedge gains could be slightly lower in the fourth quarter because are starting to grow over some of the bigger currency movements that happened last year, marketing could be back up. It was a little bit lower in the third quarter. Some things like that, that could impact the business. But there are number of different factors that we've taken into account to get us down to the EPS line. That's how we've thought about the overall outlook for the year.

And Jason in the last couple of years we've taken cost actions in the fourth quarter, so we will continue to look for opportunities there where we may be able to attack some efficiencies for the future.

Okay. Good to know. And then just on WU Connect, as far as how economics will work there, will it be similar to typical agent commissions, if we think about how you'll interface with these technology partners?

I think our business model won't change obviously. It will be definitely something transaction-based, revenue generating with consumers. That will continue to happen. I think you could find some efficiencies here dropping money on our retail or dot-com, or to an account or a bank or to a mobile wallet or to a prepaid card. Definitely there are some efficiencies here we can find to the business model, but generally it will be the similar business model that we have today.

Just last one from me, I know you had mentioned a contract termination in business solutions, any other color around that, or any information on just materiality from a revenue or earning standpoint?

Sure. That's a contract it's a business partner that we have today. We anticipate that we are going to lose that contract. It's worth about $10 million to $15 million of revenue. We are looking for ways of replacing that revenue.

Next we have a question from Smitti Srethapramote of Morgan Stanley.

This is Daniel Hussain calling in for Smitti. Just another question on outlook, similar to Bryan's question, actually, but in the latest World Bank remittance forecast from about a week ago was stable versus their prior report, and this is the first time in a while that they kept it stable. Hoping to get your perspective on migration and remittance growth in a broader sense over the next few years.

Globally I think by year end there will be about worldwide, World Bank estimates about 250 million immigrants worldwide, people who moved to another country where they were born. The migration will continue to happen. I believe that we are in a good market, generally. But it's also very much dependent on the economical development on some countries, how much they invest. Is it in the service industry, if it's in the construction industry or is in different industries. So job creation is definitely something that is important that is related to that. I'm staying cautious on the global economic development, you saw that our U.S. numbers are seeing a good transaction growth, and also on Saudi Arabia, you see good numbers, Germany we see good numbers, so I think there some, but there are also challenges in some parts of the world, and that balances that. I would generally say that we are in a good market, remittance market will continue to grow. There is a demographic needs in Europe for migrants. There's demographic needs in Japan. There's a demographic needs in South Korea and Russia for migration. Overall, I would say, long-term, it's a good market to be in.

Sorry if I missed this, Raj, but did you quantify the hedge benefit for Q3 and are you still expecting $70 million for the full year?

Yes. $21 million gain in the third quarter from the hedges. And again from a margin standpoint, that was largely offset with the negative impact of translation. We are still expecting about $70 million for the full year, as well.

Great, thank you.

And the next question comes from Tom McCrohan of CLSA.

Hi thanks. How much hedge related gains are left to recognize for this year out of the $70 million?

We've achieved about $57 million in gains thus far. We still expect about $70 million and that's going to be dependent ultimately on where the exchange rates are for the fourth quarter. So there's a little bit more to be gained in the fourth quarter, assuming rates stay exactly or roughly where they are today. Maybe $16 million, $15 million or so.

That's about $0.12 for the year, the $70 million tax adjusted adding to EPS and more on the high end of your guidance you're probably going grow EPS $0.07 versus 2014. So you enter 2016 with $0.12 headwind, plus the tax rate going up to the mid teens from a very low tax rate now, so and cross border principal decelerating 1% this quarter, which is down from 2%, down from mid single digits only a year ago. How should we be thinking about 2016 now? I know you're not giving guidance for 16, but where is the earnings growth going to come, from given the high tax rate, given the exhaustion of the $70 million in gains, and given the cross border principal is really not growing that much?

We had a negative this year the overall impact of currency is negative. Even though from a margin standpoint it's neutral, the negative translation impact. As we look at next year, there are a number of factors, we can't really give you an outlook for where we're going to be next year. At this early stage. But there are a number of different factors. Obviously revenue growth is still the number one factor for us, so we need to get good revenue growth. This year we feel that are being impacted more by the economic conditions around us. The World Bank has said that the principal growth should rebound next year so that should be positive for our business. Currency is an unknown in how it's going to impact. We know hedge gains will be less next year but currency translation, which has been a negative this year, may not be negative, and we have to see how that plays out. And then it's all the other big cost items. Commissions we've been able to bring under control this year, they are down slightly, and we're getting some beneficial mix impact. Compliance costs, that I mentioned earlier are in the 3.5% to 4% range, so a little bit more stable than we've seen, and I don't expect that to be as much of a drag. These factors, along with any other cost savings initiatives that we might have in place, we're going to have the overall impact as we look at next year.

And Tom, the $70 million doesn't go away. We did have hedges in place for next year at some good rates, so based on current rates, we think that $70 million probably is cut in half in terms of hedge gains for next year, but it doesn't go to zero.

Okay. Thanks.

The next question will come from Rayna Kumar of Evercore.

Are you gaining or losing share in cross-border money transfer?

Last year, Rayna, we grew our principal by 5% and our cross border principal by 5%, and based on the World Bank data, their most recent estimate is for 4% growth from last year. We believe we are doing well, and our focus continues to be, as Hikmet has mentioned in our digital business, because we believe that's where the fastest part of the growth is coming from and will come from. That's why we've also expanded into other potential kinds of partners. Our digital business grew by 28% on a constant currency basis last quarter and 25% on transaction growth.

Why don't you give the example of Banco de Mexico?

Mexico, we haven't given you the specific data this quarter, but we're growing faster than the rest of the market there, based on the first two months of the quarter in terms of the data and year-to-date, we been doing quite well there. We have some very solid examples. Our US outbound business has continued to grow very well. Germany and even parts of the Middle East, so we're seeing some good performance. We think that digital will also be a key driver of growth for us.

What are your current views on the competitive threat created by PayPal's acquisition of Xoom?

I can't make a comment on PayPal, and I will let Dan talk about that, and John, on Xoom. But we are very focused on our business and I believe that no one can be active no is active like us in 33 countries on online, dropping money to 200 countries. So we are serving already many, many corridors, and many customers, and our goal is to expand our online business to every country where we are present, because we have the regulatory license, we can drop money in a way that not others can drop. I am pleased with my team, digital team, they are doing a good job, and we're going to continue to expand our activities there.

That's very helpful. And just one final question. Do you anticipate any additional price cuts in domestic money transfer?

We see a comfortable result, as I said, in US domestic money transfer business, we are growing, we are improving our business quite good. Even in the non priced cities where we implemented, we are growing. It's very pleased. We always as, we are always, Rayna, we are always looking on pricing actions constantly, right? But it's not like something that it's day-to-day business. Being active in 16,000 corridors and so many bands, so many different things, we are always looking at that. I don't see any big significant investments in the pricing, and as the market is really stable.

The next question is from Jim Schneider of Goldman Sachs.

I was wondering if you could comment or provide a little more color on your point that you made regarding agent commissions coming down. Is that just a timing thing, in terms of in terms of signings, or is there something else in that, is there any kind of change in the exclusivity in the existing agent base, or can we talk a little bit more about why those rates are coming down?

You're absolutely right, Jim, it is really depending on seasonality. Generally it is stable. I do see stability here. We don't see anything of an increase of agent commissions. The other one is also the mix we sometimes drop money in a different account which is a different economic model, dropping money to an account than paying out in a retail location. That part of the mix and that part of the environment helped us to bring our cost for servicing down. I would say that long-term we don't see -- I see it quite stable.

We also went through some larger renewals in the last couple of years and we're just -- we don't have that many larger deals at this time and we're just getting some beneficial mix impact as Hikmet mentioned.

Average agent contract is about three years, five years or seven years, within three years to seven years. It is not that every day is the same and we have every year some renewals. That's a quite good balance. That shows the stability of the business, also of the agent commissions.

And then as a follow-up, regarding business solutions, the operating margin ticked down to minus 2.7%. Is that business cash generative at this point, and can you maybe talk about are there any cost levers that you might pull to get it back to break even, if it's not already, and maybe just talk about the overall prospects long-term for the business structurally?

Jim, the operating margin and operating profit was down this quarter because we took the write down for an anticipated contract loss. But from an EBITDA standpoint, the EBITDA actually improved by a few million dollars from last year and the EBITDA margin also improved to 17.4% versus 12.8% in the same quarter last year, so the business is actually tracking well from a profitability standpoint, and it's making a good amount of progress. So we feel good about that. Longer-term, we still believe in the growth opportunities for business solutions. Over the last year the business has improved its performance. The growth rates are higher than they were in prior periods. So we are pleased with our overall performance and believe that the business is tracking well.

The next question is from Kevin McVeigh of Macquarie.

Any sense from a capacity perspective, given the step up in compliance, have you seen the competitive dynamics change in terms of capacity starting to come out in the system? It seems like it is in Mexico, but in any other areas of the world at this point?

You mean capacity wise, --

Are you referring to competitors leaving the market, or is that what you're referring to because of compliance?

Yes.

You'll see in some markets that companies are finding it difficult to operate in the market because the regulatory environment is quite asking a lot of questions, and a lot of demands for them. As you recall, we invested it starting about three years ago heavily into compliance and obviously we do see the payback. We do see investments grew by about, it's currently running about 3.7% of our revenue. It's a competence for us. Running the transactions to our compliance programs in a way that like an engine makes us definitely that way being competitive advantage. It means also that regulatory environment will be in 200 countries. The compliance and regulatory challenges won't be less in the future, that will continue. We are committed to be in 200 countries where we operate and comply with the regulators, and it means also that we will be there, and that could be long term a competitive advantage.

Got it. In the C2B business, those margins bounced back nicely sequentially and year-over-year, any thoughts there in terms of what's driving that?

Year-over-year margins improved, that's related to our revenue growth, some cost saving initiatives, and that was partially offset by higher technology expense. Sequentially, the margins were down a little bit in the C2B business, and that was largely related to technology investments we are making throughout the company.

And the growth comes mainly from U.S. electronic bill pay and our Argentina business. Our Pago Facil business in Argentina was offset a little bit by our walk-in business in the U.S. and the U.S. built walk in business, to electronic business in the US is doing pretty well.

Great. Thank you.

And the next question is from Kartik Mehta of Northcoast Research.

Raj, I wanted to ask you a little bit about the online business. You said the margins are improving. Do you think the margins in that business could get to the margins of the traditional business, and if so, what type of scale would you need to see in that business to achieve that target?

I think you said the right words scale, scale, growth, growth, growth, growth, right? It's a balance. We are investing because it's a growth business, and we continue to invest in expanding the new corridors in new countries. We also see good growth, it's still small but good growth in new countries, helping us to grow this business. As this business is growing and we are expanding, that will definitely help us our margins. We are very pleased with also with numbers where we would countries where we've been present for a longer time like in the US. The 32% transaction growth last quarter in US was impressive. New customer acquisitions are impressive, 25% overall transaction growth was impressive, and that growth will definitely help us to grow us in revenue terms, and that will help us to increase the margins. It depends also how we drop money. It depends on the corridor. If you drop money into an account it is in a different margin, if you drop into a retail location is a different margin. It depends everything what the customer wants and we do serve that. But the expansion of WesternUnion.com, this new business will continue.

Hikmet, so far, pricing this year has been stable. It seems like you have been very vigilant watching it. How can you make sure, what are you doing to make sure that you don't have to drop prices significantly, not like you did a few years ago. And play catch-up?

I think what we do is that, since we dropped the price about three or four years ago, and it's also three years I guess, and we've been very diligent, right? We are looking at 16,000 corridors daily, not only the 16,000 corridors, we really look into different channels daily the customer needs, and the customer spends, watching the competition, and we have a great pricing tools that helps us. The other thing is also, as, being in 200 countries, we have great people on the market, with our 75 offices with multicultural team, they do mystery shopping, we look at pricing, how the competition is reacted to that. If there is need, we do corridor-by-corridor pricing. But as, it's all not about pricing. Our prices are 15% to 20% premium overall in some corridors, and some corridors flat, some corridors lower, but overall 15% to 20% and we know from customer service is that the customers are paying for the convenience, for global brand, for the trust, other things. It's a whole package product that we offer to the customers and that has been quite stable, and I believe for the near future, it will stay stable.

One last question, Raj I think you talk about a headwind to margins, there's been some technology spend that you had, is this a onetime issue, or do you think the spend you are doing for the technology will be ongoing?

We've been spending or investing in our technology upgrades for some time now. It's not something that's going to go away because these are typically multiyear projects. These are it's our settlement system, it's our data centers we're upgrading as well as our core processing platforms. We have had older technology in place and we really want to make sure that we're fit for growth for the future as we have additional kinds of partners, and we want to be very flexible in the market with the different requirements that we're going to have. So that's really what were doing Kartik, and it's in our spending this year. But I expect the spending to continue for the next couple of years.

I think also Kartik just some industry standpoint, I think that the industry will continue to invest in the technology as a requirement from regulatory environments increasing, digital environment is increasing, the data search is increasing, know your customer, know your agent, all of this environment is increasing, and we did invest in the early stages. It's not only about investing in the technology, technology is helping us to enable our presence in this country, making the transaction easier, giving us a unique presence, which we can serve the customers. The technology is definitely supporting our day-to-day business.

Thank you very much. I appreciate it.

And the next question is from Tim Willi of Wells Fargo.

Thank you. Good afternoon. Just a follow up, I had a couple topics around margin and the outlook. With WU Connect, I just want to clarify, this is not something that you think next year is going to result in an elevated level of spending that would put the current margin story at risk? It sounds like you feel pretty comfortable about the scalability and the ability to not have headwinds around compliance and things like that, so you be able to invest in the business and not really derail the margin story? I just want to clarify that particularly as it pertains to building out WU Connect?

Tim, actually I see that WU Connect is the ideal platform to scale that in a way that will bring us additional growth opportunities long-term. It won't, suddenly you won't see our revenues will go up on that, but I believe it's a long-term to Connect partners -- it's like an agent connection which we did in retail in the past. It's now opening our platform giving the ability to huge databases to connect to our platform, and using our capabilities. I don't see that it will have a significant changes on our business model, it will be more efficient. We will be in a way that we can drop money for these partners that others will have issues to do that. We could do it the best way, I guess.

Laura, I think we have time for one more question.

That final question will come from Matt O'Neill of Autonomous Research.

I was curious, I understand you're not talking about discrete guidance for next year, but if you could address longer-term discussion you have had over the years about 1% to 3% pricing contraction? This year, it doesn't look like that will happen, barring material pricing in 4Q. So just maybe how to think about that commentary going forward, or if it is still applicable?

It's always hard to predict the future, but from current environment, as I said earlier, operating in 200 countries, 16,000 corridors, looking at the market by market gives us the capability to predict our forecast pretty well. We feel confident that we are in a good position, we feel confident that it's not all about pricing. We feel confident that our product is well-positioned to serve also in the digital environment, to serve in the retail environment, to serve in the account-based environment, in the mobile wallet environment. I believe that we have a great product and customers are choosing for that, so I feel comfortable.

Matt, this year we are doing pricing in some corridors as we always do, but we also have some price increases in other corridors, so they're netting to zero this year, but there's still some price decreases going on in different corridors around the world.

Well thanks everyone for joining us, and have a good afternoon.

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