Prepared remarks
Good day, and welcome to the Western Union Fourth Quarter and Full Year 2024 Results Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note, this event is being recorded. I would now like to turn the conference over to Tom Hadley, Vice President of Investor Relations. Tom, please go ahead.
Thank you. On today's call, we will discuss the Company's fourth quarter and full year 2024 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. Joining me on the call today is our CEO, Devin McGranahan, and our CFO, Matt Cagwin. 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 2023 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 have reconciled those items to the most comparable GAAP measures in our earnings release attached to our Form 8-K as well as on our website, westernunion.com, under the Investor Relations section. I will now turn the call over to our Chief Executive Officer, Devin McGranahan.
Good afternoon, and welcome to Western Union's fourth quarter 2024 financial results conference call. We are committed to becoming the market leader in providing accessible financial services to aspiring populations globally. Our customers motivate us to enhance our products and services and establish ourselves as their trusted partner. We are proud to serve over 100 million customers worldwide, a steady base over recent years. Since October 2022, we have been focused on executing our Evolve 2025 strategy aimed at improving our value proposition, expanding our product offerings, and ensuring high-quality execution. Today, we reported another quarter of improved adjusted revenue growth while implementing our Evolve 2025 strategy, which targets sustainable, profitable revenue growth for Western Union. Over the past two years, we have made significant improvements in our business, and this quarter's results reflect that our efforts are paying off.
These results bolster our confidence in reaching our previously outlined financial objectives as we report solid transaction trends and improving adjusted revenue growth, excluding Iraq. For this quarter, our revenue totals $1.060 billion, with adjusted revenue growth of 1.4% when excluding Iraq, marking our third consecutive quarter of positive adjusted revenue growth. Consumer Services was a standout, achieving 23% adjusted revenue growth, led by our Media Network business, the expansion of our foreign exchange services, and continued retail money order growth. Our strategy to grow beyond CMT is showing promise and momentum. Additionally, our branded digital business performed well, with 13% transaction growth and 8% adjusted revenue growth in the quarter. Adjusted earnings per share rose to $0.40, up $0.03 compared to the same quarter last year. We noticed that Q4 2023 significantly benefited from higher revenues and operating profits from Iraq, which did not recur this quarter.
Matt will delve into our financial results in more detail and provide an outlook for 2025 later. I recently spent nearly two weeks in Asia meeting with our local teams to align on our plans for 2025. This region represents our broader company-wide efforts. In 2022, the region experienced a 12% decline in transactions and 9% in adjusted revenue. By 2024, we improved with 8% transaction growth, while adjusted revenue fell only 3%. This turnaround in Asia exemplifies our growing confidence in our trajectory. Throughout my visit, I observed advancements on our strategic agenda and significant opportunities to accelerate our performance further. The region has embraced our new approach to both digital and retail. In retail distribution, we are shifting from relying heavily on postal systems and master agents to a more dynamic model featuring owned locations at the top, branded exclusive agents in the middle, and a broad base of independent agents below.
For instance, Singapore now boasts our best-performing owned location network, achieving 7% revenue growth and 10% transaction growth in 2024, including one of the highest-volume locations in the Company. During my trip, I attended the grand opening of our first owned location in Malaysia, reinforcing my belief in the value of maintaining a small network of owned locations. We see significant potential in Malaysia, particularly in high-volume retail corridors with an owned location strategy. Australia and New Zealand have seen substantial growth through the expansion of our independent agent network, with agent locations growing over 20% since 2022, resulting in a 17% revenue increase and 25% transaction growth in 2024. Our Australia team has also adopted our next-generation digital platform, now ranking among the best-performing digital businesses in the Company, with revenue growth in the mid-teens and nearly 30% transaction growth in 2024.
We anticipate further acceleration in this region in 2025 with the rollout of our new digital platform in two more countries, further expansion of our independent agent networks and owned locations, expected completion of the DASH acquisition, and the launch of a new digital wallet offering in Australia. We forecast that 2025 will be the first year in seven (excluding COVID growth) that this region grows positively in both transactions and revenue. During our 2022 Investor Day, we outlined plans to position our retail business as the gateway to Western Union, including rationalizing our footprint, enhancing our value proposition, and improving the agent and customer experience. We reject the notion of a declining retail market, believing instead that it is stable with ample opportunities for growth. Historically, we have acted as a shared donor, but in markets where we have successfully executed our strategy, we have turned around performance, achieving positive revenue and transaction growth.
In areas where we are not meeting these goals, we can pinpoint the reasons, whether they are short-term macro impacts or additional efforts needed to fulfill our transformation. Excluding Russia, Belarus, and Iraq, our global retail business has enhanced transaction growth by 500 basis points since 2022. We remain confident that over time, our retail business will positively contribute to overall company performance. For example, our global retail originated paid out to account business increased transactions by roughly 30% last year, demonstrating the network's potential when we offer the right product and value proposition. Our retail business serves as a strategic asset, enhancing brand awareness, lowering digital customer acquisition costs, and providing a core group of customers in stores that support the growth of our consumer services. It is now much better positioned to compete, benefiting from competitive pricing, improved agent and customer value propositions, better experiences, and superior products all backed by a strong brand and scale.
This enables us to capture market share in corridors previously avoided due to uncompetitiveness. Key opportunities include corridors with significant retail activity, such as the U.S. to Guatemala, estimated at $20 billion; U.K. to India, $10 billion; and UAE to the Philippines, $1 billion. We believe our current market share in these corridors is below 10%, indicating substantial opportunities for retail growth. An often-overlooked advantage of our retail business is its strong link to our digital business. A significant portion of digitally initiated transactions is still cashed out, and we control that experience end to end. Our extensive payout locations provide customer experience advantages over digital-only competitors, improve financial economics, and allow us to engage potential future remittance customers well in advance. Additionally, we benefit from the millions of website visits from our retail customers checking store locations or transfer statuses, which enhance our position in organic search algorithms and lower digital customer acquisition costs.
Thanks to our retail network volume, our customer acquisition costs decreased by roughly 10% last year, allowing us to compete effectively in a market where many digital players spend far more yet remain largely unprofitable. Winning in retail hinges on competitiveness. We must offer the right pricing, seamless experiences, and ideal locations. We are diligently working on all three fronts, and when we succeed, we can achieve positive results. Last year, our retail business in Spain grew transactions by 25% and revenue by 18%. Similarly, our retail business in the U.K. grew transactions by 20% and revenue by 9% in 2024, outcomes of executing our strategy effectively in competitive markets. Globally, we have launched several new point-of-sale enhancements, such as Remember Me and Quick Recent, and integrated them into our updated point-of-sale system, which shifts much processing to the cloud.
We have seen improvements in speed, reliability, agent support, and customer satisfaction. We are pleased with our progress and look forward to further improvements planned for 2025. On the previous call, I shared our goal of having our new cloud-based point-of-sale system in 25,000 locations by year-end. I am delighted to report that we have far exceeded this goal, now operating in about 70,000 locations, facilitating over 2 million transactions through this platform in the last 30 days. We are rolling out in North America and APAC, and we are beginning to expand into Europe and LACA. As we refine our operating model, our execution and rollout pace are improving. Our target for 2025 is to have all relevant agents globally on this platform by the year's end. Transitioning to our digital business, a core objective of our Evolve 2025 strategy is returning our digital segment to double-digit revenue growth, which is vital for driving overall top-line growth.
Over the past year, we've concentrated on enhancing the onboarding experience, improving marketing effectiveness, and refining our value proposition and overall user experiences. I am pleased to report that these efforts are yielding results with increased customers, transactions, and revenue. Since 2022, we have launched our next-generation digital platform in more than 10 countries, including India in the fourth quarter of this year. We have noted significant performance improvements in our digital business this year in countries like Mexico, Japan, the U.K., and Chile, which have led to an increase in total customers and transaction frequency, translating to double-digit transaction growth and high single-digit revenue growth, positioning us well for 2025. We plan to introduce our next-generation platform in 10 more countries in 2025, particularly in Africa where we see real potential.
We are also enhancing our account payout network with increased direct connections and better volume discounts. Our global initiative to improve KYC experiences is underway, aiming for a more localized approach that should significantly benefit onboarding rates. We look forward to further updates as the year unfolds. Lastly, I want to highlight our Consumer Services segment. Our aim is to achieve double-digit annual growth in this area by providing new products and services to existing customers through our current channels. I am pleased to announce over 20% adjusted revenue growth in the fourth quarter, an acceleration compared to the third quarter. We continue to witness solid growth in our retail money order business, where we believe we offer one of the most consumer-friendly products available. The two main contributors to this quarter's growth were our Media Network business in the United States and our foreign exchange operations in Europe, which benefited from a larger footprint.
We are delighted to have renewed our longstanding relationship with Ahold Delhaize USA, one of the largest grocery retail groups in the nation, for an additional five years, maintaining their ability to meet cross-border remittance needs at their brand locations. Furthermore, we are excited to announce our partnership with Urpay, owned by Alrajhi Bank, the largest digital wallet in Saudi Arabia with over 6.5 million customers, which reinforces our brand in this expansive digital financial ecosystem. We are also pleased to collaborate with du Pay, the advanced digital financial services arm of du, licensed by the Central Bank of the UAE, allowing us to offer international money transfer services through their app and further solidifying our digital presence in the region. In summary, we believe we are roughly six months ahead of our initial 2022 Investor Day guidance, having achieved positive full-year company-wide adjusted revenue growth, excluding Iraq.
Regionally, we have seen improved adjusted revenue growth in North America, Europe, the Middle East, excluding Iraq, and APAC, which gives us optimism about our trajectory and what we can achieve in 2025 and beyond. Looking forward, we are optimistic about our market position and the progress we are making toward our strategic initiatives. Every day, we observe the improving health and performance of our core business and the emergence of continuous revenue and operating profit growth needed to enhance the Company's value. I am confident that we are on track to meet and exceed our 2025 goals while positioning the Company for a prosperous future. Thank you for joining the call today. I will now pass it over to Matt to review our financial results in more depth.
Thank you, Devin, and good afternoon, everyone. I'm happy to be here today to discuss our 2024 fourth quarter and full year results, along with our 2025 financial outlook. For the full year, we achieved GAAP revenue of $4.2 billion, significantly above the midpoint of our updated 2024 revenue forecast. Adjusted revenue growth, excluding Iraq, was up 50 basis points in 2024, about six months ahead of our expectations from our Investor Day in October 2022. This performance was largely driven by a 15% increase in Consumer Services and positive trends in our CMD business, aided by 8% growth in branded digital revenue. In the fourth quarter, GAAP revenue reached $1.1 billion. For the third quarter in a row, adjusted revenue, excluding Iraq, grew by 1.4%. Our adjusted operating margins for the quarter were 17%, up from 16% the previous year, with this improvement largely due to greater efficiencies in our marketing and technology sectors.
For the full year, our adjusted operating margin was 19%, down from 20% the prior year, mainly due to lower revenue from Iraq, though offset by efficiencies in our core cost base. The adjusted EPS for the fourth quarter was $0.40, compared to $0.37 last year, benefiting from higher adjusted operating profit, a smaller share count, and a lower adjusted tax rate. For the entire year, we reported an adjusted EPS of $1.74, benefiting from these same factors, which positioned us well within our updated guidance range of $1.70 to $1.80. During the fourth quarter, we recorded a notable non-cash tax benefit over $250 million due to the reorganization of our international operations aimed at consolidating our international hub. This had a positive impact on our GAAP EPS of $0.75 but was not included in adjusted EPS. The adjusted tax rate for the quarter was 12%, down from 14% the previous year, and our full-year adjusted tax rate was 13%, compared to 15% the prior year, reflecting a change in our income mix and some minor discrete tax items.
Moving to our CMT business, fourth quarter adjusted revenue, excluding Iraq, remained flat year-over-year, while CMT transactions, excluding Iraq, grew by 3%. For the full year, adjusted revenue for CMT, excluding Iraq, decreased by 1%, while transactions, including Iraq, increased by 4%. This performance came from enhancements in branded digital and digital white label within our stable retail business. Over the past two years, we've made substantial improvements to our customer agent experience and overall value proposition, which has contributed to nearly a 40 basis point increase in overall customer retention in 2024. Regarding our branded digital business, we experienced an 8% rise in adjusted revenue in the fourth quarter, alongside a 13% increase in transactions, marking our seventh consecutive quarter of double-digit transaction growth. Account payout transactions that began online sustained strong growth, increasing by 30% in the quarter.
For the full year, adjusted revenue growth improved by 800 basis points compared to 2023, and the number of new cost border monthly active customers grew by a high single digit in 2024. Turning to our retail business, we noted improvements in both Europe and MEASA excluding Iraq, although these were partially offset by declines in North America and Latin America. Europe showed momentum with a 9% increase in transactions, aided by enhanced distribution channels, broader debit acceptance, and a recovery from a prior agent loss. In our Consumer Services segment, which made up 11% of our total quarterly revenue, adjusted revenue grew by 23% in the fourth quarter, driven by increases in Media Network, retail foreign exchange, and retail money order services. I'm pleased to report that in 2024, we reached our aim of double-digit revenue growth in Consumer Services with a 15% rise in adjusted revenue, marking three consecutive years of double-digit growth in this segment.
We aim to sustain a growth rate of over 10% in adjusted revenue for Consumer Services as we introduce and expand our offerings to aspiring populations globally. In the fourth quarter, the operating margin for Consumer Services was 11%, representing a 200-basis point improvement compared to the third quarter. As these products scale, we expect our margins to enhance and align with or exceed the total company margin. Now shifting focus from our revenue to our expenses, I’d like to provide an update on our $150 million expense redeployment program set over five years. In 2024, we continued to streamline our cost base and reallocate resources to foster efficiency and growth, achieving total savings of $60 million, in addition to the $50 million saved in 2023. For perspective, we've reduced costs in our global operations function, which encompasses customer experience, real estate, key compliance processes, and agent care, by nearly 20% from 2021 to 2024.
Out of the total $100 million in savings we've realized so far, close to $30 million stemmed from efficiencies in customer experience and support. We see further opportunities throughout our business to continue optimizing costs. Looking ahead, we plan to complete our five-year commitment two years ahead of schedule, reaching our $150 million target this year. This accelerated timeline highlights our ability to leverage scale, drive ongoing enhancements, and maintain financial flexibility. Turning to our cash flow and balance sheet, in 2024, we generated $406 million in operating cash flow, which was affected by higher taxes paid, including $160 million related to deferred tax payments under the Tax Act and $70 million associated with the IRS settlement earlier this year. As a reminder, we will finalize our deferred tax payment of $220 million linked to the Tax Act in the second quarter of this year.
Capital expenditures in 2024 amounted to $131 million, which is about 3% of total company revenue. We remain dedicated to strategically investing in key areas while aligning agent compensation with performance. Over the past three years, we've maintained an average adjusted free cash flow conversion rate of around 100%. I’m pleased to inform you that in 2024 we returned close to $500 million to our shareholders, including $318 million in dividends and $177 million for share repurchases. Additionally, the Board of Directors recently approved a $1 billion share repurchase authorization, allowing us to uphold our tradition of strong cash returns to shareholders through dividends yielding 9% and a robust share repurchase program. We're also maintaining a solid balance sheet with cash and cash equivalents totaling $1.5 billion against $2.9 million in debt. Our leverage ratios stand at 2.9x and 1.5x gross and net, respectively, which we believe grants us sufficient flexibility for capital returns or potential acquisitions while preserving an investment-grade credit rating.
These levels may seem higher than usual, as we noted in the second quarter last year about the $800 million delayed draw term loan facility we utilized for refinancing a bond that matured in January this year. Therefore, our end-of-year cash and debt levels were elevated, impacting our gross leverage ratio. Looking to our 2025 outlook, we anticipate no significant changes in macroeconomic conditions compared to last year, though there’s some uncertainty in the U.S. with the new administration coming in. We project adjusted revenue to range between $4.115 billion and $4.215 billion, reflecting continuous growth in our branded digital segment, along with a 10% to 15% increase in Consumer Services as we stabilize our retail operations. The midpoint of this forecast indicates a 1% increase in adjusted revenue, excluding Iraq, aligning us with our Investor Day target of flat to 2% growth. We project our adjusted operating margins to fall between 19% and 21%, and we expect adjusted EPS to range from $1.75 to $1.85.
Please remember that Iraq contributed $65 million in the first quarter of 2024 and $34 million in the second quarter last year before normalizing later in the year. We do not expect Iraq to return to the elevated levels seen in the first half of last year, which will act as a headwind in the first two quarters of this year. Additionally, note that last year’s first quarter benefited from leap year dynamics. To wrap up, we are two-thirds into our Evolve 2025 transformation, and we believe we are well-positioned to generate long-term, profitable, and sustainable revenue growth. As we enter this crucial year, we remain dedicated to fostering growth, innovation, and value for our shareholders.
Questions and answers
Our first question comes from Tien-Tsin Huang from JPMorgan. Please go ahead with your question.
Thank you for going through all the details here. Just thinking about the outlook on the revenue side and the range what might cause you to be at the low end versus the high end? Is it worth maybe going through some basic assumptions there that might influence the outcome?
Tien-Tsin, thanks for joining the call today. The variability between the high end and the low end of the range. There's a lot of uncertainty in the market. Things don't move lumpy. We are super proud and excited about where we've come from. If you look back two years ago, the Company was declining mid-single digits. We were able to exit last year with 50 basis points growth full year and 1.4% full year. So super excited about what we accomplished. The assumptions that are underlying that is continued consistent macroeconomic conditions we experienced last year. So, no major changes in currency or inflation. We have in our core businesses, we expect to have high single-digit, low double-digit branded digital growth. In prepared remarks, we expect to have 10% to 15% growth in consumer services. What could move us to the upper end of the range is further stability in the retail market, acceleration of branded digital this year, higher consumer service we had later in the year. So, there are many things that could put us at the upper end or even above, but it's obviously an uncertain market where we are, as we highlighted in the prepared remarks.
Yes, that's reasonable. Regarding Consumer Services, you mentioned it—sorry.
Go ahead, please.
Yes. I was just going to have a quick follow-up. Just on the Consumer Services side. You called it out there, 10% to 15%, you're running in the lower 20s exiting the year. Your mid-teens for '24. What's driving the deceleration? How much of that is conservatism or were there some one-timers that maybe lifted the consumer services? It sounds like some of the initiatives could actually drive acceleration. So just trying to reconcile all that.
Yes. Tien-Tsin, that's a great question. I mean you've known me now for three years. So, it could move around a lot of different places you've called me conservative for. But there are things in there that we had some strong Q4 on Media Network. Usually, media is very strong in the latter part of the year, as you know, from other businesses. That may not continue for all of next year. We have launched a couple of businesses that we start to cycle through as we go forward but we do have line of sight to get us to our commitment of 10% to 15%.
Our next question comes to us from Darrin Peller from Wolfe Research. Please ask your question.
Just want to ask about the digital aspiration to drive double-digit growth on revenues. Obviously, the spread continues to be in that 6, 7 percentage point range and you're continuing to show great results on double-digit growth on transactions, but help us understand the driving factors to allow for double-digit revenue growth here in the digital transaction side in the digital business? Then maybe just remind us, what is your timing expectation on that?
Yes, Darrin, great question. Thank you. And it's something we continue to spend a lot of time talking about. I think it's important just to reflect on the progress we've made. Two years ago, our digital business was shrinking revenue by 1%, now it's growing revenue in the high single digits. That has been the function of driving our customer acquisition and our transactions in the double-digit range. We expect to be able to continue to do that as we've now done for seven quarters in a row. So, this becomes an exercise of managing what is in the base. And as you know, some of the factors that we've talked about is the increasing growth or the relative speed of growth to pay out to account which has a different revenue per transaction profile than our historic payout to cash. And our continued attrition of the legacy book, which has a different pricing profile than all of the customers that we've acquired in the last two years as we've become market competitive on new and repeat transactions. So as that book continues to shift and manage. We continue to expect, and we've talked about a 300 to 400 basis point gap between transactions and revenue. As we've talked about in the past, if we accelerate transactions, that range might increase, but we would be okay with that. But as we continue, we believe it will stabilize over the course of the next 18 to 24 months.
Our next question comes to us from Will Nance from Goldman Sachs. Please ask your question.
I was wondering if you can maybe touch on some of the dynamics that led to the modest deceleration in the North American revenues. If you could just kind of go through what you're seeing there? And I guess, specifically, you called out a few macro impacts that you were seeing last quarter. I think one of them would have related to North America, like the U.S. to Mexico quarter. The other one a bit in LACA. So, it would be helpful to get an update on that as well.
Will, I hope you're doing well. Let us remember that we are, in fact, a global business and highly diversified only 30% of our revenue comes from the U.S. We did see, as we talked about in the third quarter, some sluggishness in North America but, I remind you we had 1.4% ex-Iraq adjusted revenue growth in the quarter, which is the second-best quarter the Company has had on adjusted revenue basis in the last 20 quarters. So even with the slowness in North America, we continue to propel our business according to our strategy around the world. We are still seeing the effects of the macro events down below the border and the elections that we talked about in the third quarter as the migratory patterns of people shift, and we're obviously seeing some effect of the election in November as we normalize to a different environment here in the U.S. for migrants.
Got it. That's very helpful. And then just maybe a separate follow-up. I know one of the bigger drivers of that, the positive revenue growth this quarter was the consumer revenue. I was wondering if you could hit on the margins in that segment and just how you think about sales margins over time? And maybe what level of revenue you need in order to kind of achieve your improving target margins in that segment?
Will, thanks for the question. As we talked about in the prepared remarks today, we did progress by about 200 basis points from Q3 to Q4. We expect each product that we've launched, whether that be the media network, the prepaid business, the wallets and you keep going through them. We believe each one of those has company-wide margins that are better once they're fully at scale. As we've talked about in prior quarters, each one of them will roll out at different pace. We launched the prepaid business a little over a year ago now in the U.S. We're now starting to launch in other parts of the market. Each one of those will have a ramping process. The media network is largely in the U.S. So, we think you're going to continue to make progress towards our company average, but it will happen over the next couple of years as we roll out products.
Just talk philosophically for a second. If I could grow the whole company 23% at 11%, I might take that trade. So, we're pleased with the fact that we've launched businesses. We're seeing an adoption by customers and an acceleration of a revenue growth profile that looks significantly different than our historic norms. So, we will continue to invest in these businesses. And as we see market opportunities continue to grow them. I am not in the business of trying to slow the growth to improve the margin in that particular segment.
Our next question comes to us from Ramsey El-Assal from Barclays. Please ask your question.
Thanks so much for taking my question today. Branded digital transactions decelerated a bit versus last quarter, although still, as you mentioned, solidly in double-digit territory. But the spread to branded digital revenue actually tightened a little bit by 100 basis points to about, I think, about 5%. Can you give us your thought on spread dynamics in '25 and what we should expect through the year in terms of your, I think, longer-term goal to sort of tighten that up?
Thank you for joining the call today. We're excited about our progress over the last two years. In 2022, we saw a 1% increase, and this year we grew transactions by 13%, moving revenue from flat to high single digits. While we've made significant strides, we recognize that there's still more to achieve. At our Investor Day two years ago, we projected our business could reach mid-teens growth overall, and we're working towards that. In terms of closing the gap between transaction revenue, our focus is on driving top-line growth and attracting more customers, which we believe will enhance revenue growth and earnings per share over time. We expect the gap to narrow as we adjust pricing and transition from legacy clients with higher rates to new clients. Additionally, while our account payout business is growing by 30%—as noted on both retail sides—it does generate lower revenue per transaction, but it remains very profitable and does not incur commission costs, which we view positively.
And a quick follow-up. Just on M&A. You made some smaller acquisitions DASH, and I think the Mexico digital wallet recently, maybe update us on your asset M&A, given all the changes in the environment. And also, these deals reflect small because was there any inorganic contribution in the quarter that's material to call out.
To clarify, neither deal has officially closed yet. We are waiting for regulatory approval in both Singapore and Mexico, so there would be no contribution to the quarter from either transaction. We remain an interested buyer of properties that fit particularly well with our strategy. And as I have talked about, allow us to accelerate that strategy in a cost-effective way with strong returns on our capital deployment. So, the addition of DASH was an acquisition that, as I highlighted in my comments on APAC allows us to accelerate our digital wallet capabilities in that region and strengthens what's already a pretty good franchise for us in Singapore acquired cost-effectively, and we believe will be additive to both the strategy and the Company once it closes in the latter half of 2025. As we look around the world, when we see other things like that, I would anticipate that we'll be prepared to act.
Our next question comes to us from Jason Kupferberg from Bank of America. Please ask your question.
I wanted to ask about the retail transaction growth trend. Obviously, it's an improving trajectory here. I'm just wondering what you think could be drivers of further improvement? Is it just broader rollout of the new point of sale or some other dynamics?
Most of the incremental improvement will continue from the strategies that we've already launched, which are optimizing our distribution network, continuing to grow our independent agent footprint, improving the level of service and customer experience, which includes the point-of-sale rollouts and strategically managing our go-to-market against specific corridors and customer segments. The biggest opportunity, as you can tell, is probably now in North America relative to the performance that we're getting in most of the rest of the world's retail networks. We continue to wait for the market to stabilize a bit in LACA but that has been and was last year a mid-single-digit grower. So, we believe that will continue as we settle through some of these transitory postelection issues. So, I would look forward to LACA returning to mid-single digits and us continuing to execute the strategy in North America, which will propel the overall retail business into that stable to slightly positive zone that we believe it can be.
Okay. And then just coming back to your comments earlier that you've seen a little bit of impact on migration patterns post-election thinking about Mexico, is there any headwind for that kind of factored into your guidance? And maybe can we just get an update on what percent of your total C2C revenue is coming from the U.S. Mexico corridor?
In terms of our guidance, we anticipate a revenue growth range of 0 to 2%. The extent of the impact will vary based on its severity, but we believe this range is broad enough to give us some flexibility. Regarding the U.S. to LACA business, North America accounts for about 30% of our overall business, with the U.S. to LACA making up the mid-20s percentage.
Low-to-mid 20s.
Our next question comes to us from Vasu Govil from KBW. Please ask your question.
I wanted to follow up on the question about migration patterns. Matt and Devin, can you provide some insights on how the new administration's initiatives, particularly regarding deportation, might impact your business? I also have a follow-up question.
I believe we will likely see a decrease in transaction frequency coupled with an increase in the amount per transaction. This means that while people may send money less often, when they do, the amounts will be larger. It's important to note that this trend is mainly observed in the retail sector, particularly among newer arrivals in the United States. In 2024, we anticipate new customers unfamiliar with retail who are sending money to the LACA region, which encompasses more than just Mexico and currently accounts for only about 2.5% of our total revenue. The concern is that this percentage might decline. Last year, this part of the business was growing at a low single-digit rate, indicating that it hasn't performed strongly, which is reflected in some of the softness in North American figures. While there is certainly some risk involved, we need to monitor this administration's changes closely. However, the majority of our customer base consists of individuals who have been here for some time, have stable jobs, and regularly send money home to their families, and we believe this pattern will continue.
That's very helpful color. And I guess my second question was on crypto, which seems to be having a resurgence. Any updated thoughts on your view and how you see that impacting your business long term?
So, I've said this publicly a number of times. We pride ourselves in being one of the best in terms of managing our risk, compliance and protecting our customers from fraud and protecting the integrity of the international financial payment system. If there is an opportunity in which you can do that legally and with high protections for customers and financial integrity with crypto, we will certainly explore that. And in fact, we would welcome an opportunity and there are places in the world where we are exploring this, where we could actually settle funds via crypto and enable us to reduce both the float that we have in the system, as Matt usually talks about any given day, we have $1 billion-plus floating around to enable our business to reduce the float in the system, which will certainly help our balance sheet, but also to speed up some of the inefficiencies of using the traditional SWIFT-based banking system to move money and settle transactions. So, we look forward to the innovation, but we only look forward to the innovation in a manner that would be consistent with our perspective of being and continuing to be a highly regulated and high-integrity financial institution.
Our next question comes to us from Rufus Hone from BMO. Please ask your question.
I wanted to ask about the retail business, excluding Iraq. And if I'm doing the math correctly, it looks like this quarter that was down about 3% year-over-year, a slight improvement from last quarter. I'm just curious to get your view about how you think that will trend through 2025.
Thanks for joining the call, Rufus. As we discussed earlier and as Devin mentioned in his prepared remarks, we are very excited about the progress we have made in our retail business. We have improved from being down two years ago in the high single digits to now having transactions decline by only a few percentage points. We believe that, as Devin indicated in response to a previous question, we can continue this upward trend by rolling out our new point of sale system, enhancing our customer and agent services, and improving our value proposition. We are confident in our ability to keep making progress in this area.
Rufus, you'll recall, two quarters ago, we were getting the retail business closer to negative 1%. And the slowdown that we've seen in the Americas has obviously caused the third quarter now. We're calling some of that back in the fourth quarter, which you appropriately note. So, there's going to be some volatility in that. It's a large-scale business. But the trajectory, which is upward and to the right mean two years ago, our retail transactions were down 7%. This year, they were only down 2%. So, we've seen a 500-basis point improvement, and we see strength in many regions around the world including the Middle East, Iraq, including the comments I made about LACA or made about APAC and obviously, the strength you can see in the numbers in the quarter from Europe.
Our next question comes to us from Chris Zheng from UBS. Please ask your question.
Thank you for taking our questions. Chris for Tim Chiodo from UBS. Wanted to hear your thoughts about your investment needs longer term. And I wonder if you could rank-order the areas of your investment priorities beyond this year? And related to that, you've been tracking half your five-year expense redeployment plan. So, I guess could you talk about how you're planning on funding potential incremental feature investments once the rate deployment program is completed?
Chris, thanks for being on the call today. Please say hello to Tim for us. We are very confident in our ability to make investments, and we don’t see any challenges regarding our capacity. We believe there is still ample opportunity to redeploy costs within our business. We mentioned our current program, which is a $150 million investment over five years, where we’ve already mobilized $110 million. We have our Investor Day coming up in November, where we will discuss more. We see significant opportunities ahead. We believe our balance sheet has sufficient capacity for any strategic mergers and acquisitions that could enhance our growth. We also think we have enough room in our technology budget to invest in new products and tech development. Our focus will be on continuing to expand consumer services to meet the needs of our more than 100 million customers worldwide, thus growing our total addressable market and improving their financial well-being. This will be our direction over the next three to five years. Devin, do you have anything to add?
Yes, I'd add two things, right? And think Matt highlighted in his commentary, the success, and I'll just use the operations area as an example, and reducing operating costs by 20% over the three-year period. We continue to see plenty of opportunities within the Company, within the existing cost base to have year-over-year performance improvements, which can both drive the bottom line but also provide money to invest in our growth initiatives. So even though we're completing the $150 million, I don't think that's an end to the opportunities that we see. And certainly, I commented on from 2022 when I arrived. The second is Matt also highlighted that we are going to finish the last of the Tax Act, deferred tax payments in April of $220 million. And for most of my tenure as CEO, that has been a burden on our cash flow conversion and cash flow capital return opportunities, and so getting that behind us actually changes the dynamics of our capital creation potential and thus allows us the opportunity to both return more capital to our shareholders and/or invest in inorganic opportunities to drive the business.
Our next question comes to us from Chris Kennedy from William Blair. Please ask your question.
You've mentioned the strength of the digital business in Australia. Can you elaborate on that? What are the dynamics in that market? And is it possible to replicate that success in other markets?
Yes. So, I just came from Australia. And it's a super interesting and super competitive marketplace. Our competitors are spending an enormous amount on advertising, it's on bus stops, it's on television. And it's even some of our competitors who historically not relied on advertising to drive their growth. So, it's a fascinating dynamic. Our growth is driven by the quality of the product and the brand that we have in the marketplace. We have a strong business throughout APAC because of our long history of being a payout partner in many of these regions and much of the growth from Australia is into other APAC countries. So, it's Australia to India, Australia to the Philippines, Australia to China, Australia to Indonesia. And so, the strength of our brand across both send and receive markets, the quality of the product, if you'll remember, we launched our next-generation digital product in Australia first. So, we've been there the longest. And so we have very high conversion rates for new customers to become customers. And then, we have high repeat transactions and product usage, given the quality of the experience that they have. We believe it's completely repeatable. And as you heard in my prepared comments, we're looking to accelerate the rollout of that next-generation digital platform in 2025 to up to 10 more countries to help accelerate our global business.
We have time for one more question, and that question will come from Andrew Schmidt from Citi. Please ask your question.
I wanted to explore the key factors for digital growth in 2025. When considering this, I see user growth, transaction frequency, pricing, and mix as important elements. As you look ahead to 2025, are there any changes in how these elements will develop for digital growth compared to 2024? Or is it expected to be similar?
I would like to add another aspect to your points. In addition to those foundational dimensions, we also consider geography. Our digital business operates in over 50 countries around the globe. As we underwent our transformation, especially recalling back to 2023, we discussed how the business gained momentum as we implemented our new go-to-market strategy worldwide. We started in North America, then expanded to Europe, the Middle East, APAC, and finally LAC. We are currently repeating this process with our next-generation platform rollout. We also observe geographic improvements related to acquiring new customers, increasing transactions, and overall principal, among other factors. The foundational elements remain largely consistent. We have been adding new customers at a steady rate over the past couple of years with an efficient customer acquisition cost. These new customers are of higher quality than those we previously acquired, leading to better retention and more transactions per customer, even though they generate lower revenue per customer due to our competitive pricing. As I mentioned, we are rolling out the technology platform, similar to our efforts in Australia, to more markets globally, where these advantages tend to strengthen compared to our existing legacy technology platform.
Thank you for joining the Western Union fourth quarter and full year 2024 results conference call. We hope you have a great day.