Western Union and Zelle Executives Dish on Competition and the Future of Mobile Payments

“Money is like manure; it’s not worth a thing unless it’s spread around encouraging young things to grow,” wrote playwright Thornton Wilder, channeling 16th century British philosopher and statesman Francis Bacon. The old quote describes the digital movement of money—a hot area in tech stoked even brighter by Facebook’s announcement earlier this week about its Libra cryptocurrency project.

And Libra was the subject of the first question that Fortune senior writer Robert Hackett asked during a session at Fortune’s inaugural Brainstorm Finance conference in Montauk, N.Y., on Wednesday. Providing the answers were Hikmet Ersek, president and CEO of The Western Union Company, and Lou Anne Alexander, group president of payment solutions at Early Warning Services, a firm co-owned by several big banks including Bank of America, JPMorgan Chase[/hotlink], and Wells Fargo that operates the two-year old Zelle payment app.

Hackett asked about the potential competition that Facebook might offer, especially as there might be “nearly zero” costs for transmitting payments through the Libra system.

Ersek noted that the new Libra venture has considerable work ahead having developing a full payment and money transmission system, especially when considering so-called unbanked people who may need to pay and receive actual cash, not just a transaction on a mobile phone. “The real cost is serving the customer in the last mile,” he said, referring to accepting and delivering money in local currencies, whether electronically or in person. “You have to be in the streets of Cairo, the streets of Nairobi. It took us many, many years to build a global system that moves $300 billion every year.”

For Western Union, that requires a broad network of local offices. Customers must trust that $500 sent from Chicago to Jamaica will arrive in minutes, working with more than 130 currencies, and fraud-detection. “Libra is more of a payment system, not the last mile,” Ersek said. “How do you take that currency, translate that into a fiat currency? How do you do that?”

Hackett also asked Alexander about competition, given that Zelle is young and competes against better-established rivals like PayPal’s Venmo, Apple Pay, and Square Cash.

“I would say look at our numbers,” Alexander said, quoting figures like $39 billion transferred in 147 million transactions in the first quarter. She went on to praise her 30-year old company’s close relationship with established banks. “Most of the customers actually tried Zelle for the very first time because it’s offered by their financial institutions,” she said.

Zelle currently is marketing to Gen Xers and Baby Boomers who make up half of their new customers. That requires educating them about using the app.

Zelle’s owner is also looking for new sources of revenue. That includes helping insurance companies pay out home and car damage claims to customers. “Where I believe some of the biggest business will come is small business,” Alexander said.

Hammering home the idea that Western Union is nimble, Ersek said that the company is willing to cannibalize its own business by introducing new products. Although the economics cryptocurrencies don’t currently provide transaction costs that are low enough to make them feasible for the company, for example, it does have employees who are following the technology to see if, and when, it may create cost advantages.

More must-read stories from Fortune Brainstorm Finance:

Brainstorm Finance 2019: Watch the livestream of the inaugural conference

—Bank of America CEO: “We want a cashless society

—Tala CEO: How Facebook’s Libra cryptocurrency can help companies scale

—Charles Schwab CEO: Actually, we’re killing it with millennials

—Listen to our new audio briefing, Fortune 500 Daily

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