Devin McGranahan
President and Chief Executive Officer at Western Union
Good afternoon and welcome to Western Union's second quarter 2023 financial results conference call. We are pleased with the results we reported today and the progress we are making against our Evolve 2025 strategy. The work we have been doing to deliver sustainable, positive revenue growth is beginning to take effect.
In the quarter, we continue to drive improvements in the underlying trajectory of our business with positive transaction trends across both our branded digital and our retail businesses. Recall, two key pillars of our Evolve 2025 strategy includes stabilizing our retail business and returning our digital business to low-double-digit growth rates. The second quarter was continued evidence we are making good progress on both objectives. The second quarter was the first time in eight quarters that we have achieved positive transaction growth across the company with total C2C transactions excluding Iraq, growing 2% year-over-year. This is a significant improvement from the double-digit negative transaction trends we saw for most of 2022.
I will provide more details on some of the initiatives we are working on but first, let me provide a quick summary of our financial results. Our total revenue in the quarter reached $1.17 billion, reflecting a 9% increase on a constant-currency basis, when excluding the contribution from Business Solutions compared to the same period last year. This growth was driven by several factors including improving fundamentals in our core business, the increase in revenue from Iraq, and the benefit of Argentinean inflation. Adjusted earnings per share came in strong in the quarter at $0.51. Matt will further discuss our financial results in more detail and provide an update on our enhanced 2023 financial outlook.
Shifting to the macro. Last month, the World Bank came out with its semiannual migration and development brief which is calling for low-single-digit remittance principal growth in both '23 and 2024. The World Bank noted headwinds to faster growth and remittance volumes including a slowing global economy, persistent high inflation, increased interest rates, and Russia's invasion of the Ukraine. These are all macro themes that we have spoken about in recent quarters and factors, we are paying close attention to. Nevertheless, we continue to see resilience in our own customer base with the average PBT excluding the higher PBT from Iraq, remaining relatively flat year-over-year.
We also continue to believe that there are significant opportunities within our own business that will allow us to execute our strategy successfully even in the face of a potentially slowing remittance market. One of those important opportunities is the acceleration of our branded digital business, which has been a key focus and the primary driver of the transaction improvements we have seen in recent quarters. This business has continued to show momentum in the quarter with 12% growth in transactions globally, which is a significant acceleration of the transaction growth trend we reported in the first quarter of 2023, which was up 7%.
Constant currency branded digital revenue also improved this quarter sequentially to minus 2% with transactions up 12%, which reflects improvement in the underlying health of the business compared to the second quarter of last year where transactions were down 3% and revenue was up 1%. As I have stated, we started out by focusing on growing our customer base, again which in turn would lead to growth and transactions, and finally, growth in revenue would follow. I am pleased that we are on track and maybe even slightly ahead of the trajectory we laid out at our Investor Day last fall.
These improvements in our branded digital business are attributable to the successful execution of our updated go-to-market strategy, which is driving meaningfully more customers to our digital properties. In the quarter, we saw global new customer acquisition, up 20%, which underscores the effectiveness of our marketing and customer acquisition strategies, as well as the improvements made to our customer onboarding funnel conversion and overall customer experience.
A central element of our updated go-to-market strategy is the constant focus on ongoing improvements in funnel optimization. In the second quarter, we simplified our historical registration process by limiting the number of fields required to register, and by moving our value proposition front and center to help drive customer conversion. As a result, we have improved our web registration conversion rates by almost 500 basis points in our US outbound business relative to the first quarter of 2023.
In addition to improving our registration conversion rates, we've also seen a dramatic improvement in our first transaction approval rates. In the second quarter, our first transaction approval rates in our US outbound business increased roughly 600 basis points year-over-year, driven by several improvements we have made to our decisioning models. For example, our new omnichannel customers for our new omnichannel customers, we now use a customer's previous retail transaction history in our digital approval process which predictably significantly enhances decision outcomes. As previously discussed, our updated go-to-market strategy is focused on optimizing LTV to CAC. By leveraging data-driven insights to improve audience targeting and funnel conversion, we continue to see a sustained improvement in our branded digital customer acquisition costs, which has strengthened our beliefs with the changing -- with the changes we are making are indeed durable.
Moving now to our retail business, which is powered by our extensive agent network of over 400,000 active locations providing accessible financial services to those customers who prefer in-person transactions. As we have discussed and expected, given the scale and dispersion of our retail business performance improvements will take more time.
Our retail business saw positive transaction trends in the quarter with 120 basis point improvement in the growth rate relative to the first quarter excluding Iraq, Russia, and Belarus. Performance year-to-date supports our belief that the retail transaction trends can continue to improve over-time, which is needed to stabilize our retail business.
As laid out in our Evolve 2025 strategy last fall, nowhere has this evolution truer than in Africa. In the quarter, we saw 6% revenue growth in our retail business in Africa. The management team that we have there is top-notch and has been laser-focused on driving improved retail performance across the region.
More broadly in Europe, we continue to make progress on our controlled distribution strategy we have now launched over 70 new concept stores since last year. During the second quarter, we also opened two exclusive Western Union-branded corporate-owned stores in Belgium. This type of distribution allows us to control the customer experience, increase the number of products and services we offer, promote the retail to digital escalator, and allows us to have deeper engagement with our customers.
Our focus with the Evolve 2025 -- our focus with Evolve 2025 in retail has been to significantly improve our customer and agent experiences, including faster transactions, better end-to-end customer and agent experiences, and higher-quality agent support. As an example, I wanted to give you just a quick update on the quick resend function that we discussed on the last call. The use of quick resend were repeat transactions can be executed in a fraction of the time that was historically required continues to increase our across our US agent base, and has grown by over 10 times from March of this year. In June, over 30% of all transactions completed at our Vigo brand were done using this quick send functionality -- quick resend functionality.
These types of process improvements may sound small in isolation but we believe they can add up and become meaningful, a better customer and agent experience can ultimately improve retention and drive growth in the near term, but they are also driving efficiency throughout our organization. For example, roughly 15% to 20% of all calls to our call centers were associated with a refund request. As a result, we launched a process called One Step Refund, which created a self-service tool for our agents to process refunds in one step and avoid the need to engage our support staff. During the month of June, we saw a 20% reduction in refund support calls.
In more recent weeks, the percentage of refunds processed by our agents without call center support surpassed 50% of all refunds process globally up meaningful -- meaningfully from the mid-teens range that we were at early last year before we scaled this One Step Refund process. The One Step Refund process was designed primarily to improve agent and customer satisfaction. However, by simplifying the refund process, we now have fewer calls coming into our call center and thus can reduce run-rate costs while focusing our customer service representatives on resolving more complex issues with better more personalized support.
Last year, on the first quarter earnings call, I talked about the process improvement opportunities, I saw that could enable us to invest for growth while maintaining our strong margins. While transaction volumes have been increasing in recent months monthly call center volume has decreased to the lowest level in at least eight years. Agents' important calls have also dropped and collectively we have seen a 30% decrease in total call volume driving our contact rate down by over 20% year-over-year. I look forward to sharing more on this topic with you in coming quarters.
We continue the build-out of our broader -- broader ecosystem strategy and are pleased to announce the launch of our new prepaid debit card in North America. Just this month, we completed the first commercial transaction on our prepaid card and have begun a friends and family rollout in the US. This card will provide customers with a convenient and secure payment solution, allowing them to manage their finances with greater flexibility. By reintroducing a prepaid card solution, we aim to expand our product offerings and provide additional value to our customers. We are also now in the final phase of our friends and family testing in Brazil and we expect our new digital wallet to go live in the third quarter. Brazil is one of the few markets where our digital business is larger than our retail business on a transaction basis. As such, we are excited to be able to expand our digital offering in this important market.
Last month, I had the opportunity to visit Europe and review the progress we are making with our digital wallet there. We've continued to focus on the four markets. We have launched so far, and have made improvements to the onboarding processes and to the customer migration experiences. As noted on the last call, current and former digital and retail Western Union customers continue to be our most valuable wallet customers, improving the omnichannel experience will be important to further expand with these segments.
Finally, shifting to some new additions to our executive team and partnerships. First, I would like to announce the addition of Sam Jawad to our management team as the new Head of Ecosystem. Sam joins us from ACI, where he served as the Executive Vice-President and Global Head of Banking. Sam brings nearly 20 years of experience in digital banking and payments and has a strong track record of business-building. I would also like to announce the addition of Karen Whalen, as our new Chief People Officer. Karen joins us from West Corporation, where she was the CHRO. Karen brings nearly 20 years of experience and human resources and is a high-impact leader that will play an important role in supporting us with our ongoing Evolve 2025 transformation.
Lastly, we have partnered with UNICEF to provide our quick cash services. This partnership links closely with our purpose, which aims to help people prosper. We are also publishing our annual ESG report in the coming weeks, which will highlight our ongoing progress with key focus areas, including furthering economic prosperity and promoting the integrity of the global money movement system.
Looking ahead, we remain optimistic about our strategic direction and the positive progress we're making. The global payments landscape continues to evolve rapidly driven by increasing digitalization, changing customer preferences, and our customers' aspirations for more. Western Union is well-positioned to capitalize on these trends. Our digital services combined with our extensive retail network position us as a trusted provider of flexible and reliable financial solutions to the aspiring populations of the world.
In conclusion, we are pleased with the improved trajectory of our business driven by improving transaction trends across both our digital and retail businesses, our investments in digital acceleration in customer-centric initiatives are driving the company forward. We are excited about the launch of our new prepaid card solution in North America and the opportunities it presents as part of our ecosystem offering. We remain committed to delivering value for our customers, our shareholders, and other stakeholders while adapting to the rapidly evolving market dynamic. Thank you for joining the call today.
I would now like to turn the call over to Matt to discuss our financial results in more detail.
