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WorldFirst is a foreign exchange company known for offering some of the best rates and features in the industry.
Its head office is located in the UK, but its US subsidiary has recently gained importance because it was used by a large number of Amazon sellers. However, WorldFirst has announced its immediate withdrawal from the US market. All operations must stop completely on February 20th.
The reason for this abrupt change is the agreement between WorldFirst and Ant Financial, the first mobile payment operator in China. The endless trade war between the United States and China is a major factor in this situation. It is difficult to predict exactly what the results will be.
What is WorldFirst and why is it important?
image via WorldFirst
Today, WorldFirst is one of the leading money transfer companies used for fast and affordable international transfers. The company's history began in 2004 with the opening of its first office in the UK. Today, it also has offices in Singapore, the Netherlands, Australia and Hong Kong. The situation in the United States being what it is today, the future of WorldFirst's American subsidiary seems bleak. The loss of jobs is inevitable because the entire operation has been closed. How many people will be able to return to the company under a new management and the brand will remain unknown.
WorldFirst is a company that has built its reputation on providing secure international transfers that are also fast and affordable. The company guarantees the best exchange rates, which is why it is one of the most reliable suppliers. It's not the biggest turnover in the UK. However, it is in the top 10 currency transfers, alongside industry leaders like HiFX, Transferwise and Moneycorp. WorldFirst reports having more than 75,000 active customers a year. However, that will certainly change now, and the question is whether it will be a change for the better?
What is the WorldFirst and Ant financial agreement?
The agreement between WorldFirst and Ant Financial seems rather simple at first. To put it simply, Ant buys WorldFirst for $ 700 million. Takeovers happen at any time in business, so there should be nothing remarkable for those who are not immediately affected by the change of legal employer. The most important thing for customers is that there could be a short delay of transfer delay as the company gets a foothold with the new order.
If so, why exactly did this agreement lead to WorldFirst leaving the US market with such haste?
The answer to that is in the past. A year ago, almost to the day, Ant Financial had already tried to enter the global cash transfer market. At the time, she had to buy MoneyGram for $ 1.2 billion. However, the agreement failed, with Ant having to pay a termination fee of $ 30 million. And all of this happened because MoneyGram is based in Texas and the US government blocked the investment by citing "national security reasons".
This situation is undoubtedly directly related to the trade war between the United States and China, which seems to be worsening. For the moment, a new trade agreement between the two countries is planned for the month of March. However, it is unclear whether governments will reach this agreement or if the situation will worsen further.
Whereas WorldFirst is one of the leading money transfer services used by Amazon retailers, this closure is hitting traders hard. They have already been advised to switch to the company's direct competitor, Payoneer. This means that even if WorldFirst resumes its operations in the United States under a different brand, the losses for the company will be enormous. Most likely, it might not recover, given the ferocity of competition.
Yet WorldFirst's withdrawal from the United States to avoid any potential problems caused by US regulators appears to be the most effective decision. The situation is extremely difficult, but given the disastrous deal with MoneyGram, it's no wonder that Ant and WorldFirst have decided to take the safest route.
What should WorldFirst users expect in the future?
The estimated value of Ant Financial is approximately $ 150 billion, making it the largest in the world. Therefore, one thing WorldFirst customers should not worry about is a drop in the quality of service. In fact, it is likely that the company will grow, bringing better features and new opportunities to all its customers.
Those who have used the US branch of WorldFirst, however, are in a different situation. According to currently limited information, this part of the society will undergo a full name change. It will be called Omega and will be completely separate from WorldFirst. Nothing else is known today and one can only wonder if the new Omega will still have a fraction of the success of its predecessor. It remains to be seen whether this will help mitigate the job losses caused by WorldFirst USA's closure.
Selected image credit: WorldFirst Facebook page
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