Western Union has inked a definitive agreement to acquire a 15% stake in stc pay, the digital payments unit of Saudi Telecom Company.
Under the agreement, the cross-border payments giant will invest up to $200m in the stc pay digital wallet.
The acquisition values stc pay at SAR5bn ($1.3bn), reported Reuters. The company will use the investment to fund its long-term expansion strategy.
The deal awaits regulatory approvals, with completion expected in the first quarter of 2021.
stc pay, which has over four million customers, and Western Union, will extend their commercial partnership alongside the investment.
stc pay’s acquisition is part of Western Union’s digital growth strategy in 2020.
Western Union will provide money transfer services to stc pay’s users.
stc pay customers can use its app to transfer money to over 200 countries and territories in more than 130 currencies.
They can do so via Western Union’s accounts, wallets, cards and retail network.
Western Union CEO Hikmet Ersek said: “I am extremely pleased with the progress of Western Union’s digital growth strategy this year.
“A key element of this strategy is partnering with innovative financial companies to expand services for their customers and drive incremental growth for Western Union.”
Western Union president of global network Jean Farah added: “This is a great opportunity to participate in the growth potential of an innovative and dynamic financial services company such as stc pay and supporting its growing customer base through our market-leading cross-border services.”
stc group CEO Nasser Alnasser said: “As a digital enabler and a pioneer in the digital transformation, we aspire to play a vital role in the vision of the Saudi Arabian Monetary Authority (SAMA) in many initiatives that support creativity and developing the financial services, as fintech is a pillar of stc strategy.