Western Union is facing business challenges amid a broad shift from cash to digital remittances and the Trump administration’s immigration crackdown.

Executives at the money-transfer company are balancing three urgent tasks simultaneously: cut costs, boost sales through a digital transformation and close on their $500 million purchase of a smaller rival, International Money Express, also known as Intermex.

On Thursday, the New York Department of Financial Services approved the Intermex sale with several conditions. Western Union agreed to cap fee increases in New York at the inflation rate and to maintain current retail locations in the state for three years.

The same day, however, regulators at the California Department of Financial Protection and Innovation – which had approved the transaction earlier this year – said they were suspending an approval extension they’d granted on July 31, Western Union and Intermex said Friday in a joint press release. 

The DFPI’s decision was “based on a need to further review the transaction as a result of the intervening six months since approval was originally granted,” the companies said in the release.

Denver-based Western Union and Intermex “remain committed to completing the transaction” and will close "promptly" once California regulators complete their review and reinstate approval, they said in their press release.

The companies did not respond to messages Friday for comment on the California review or other conditions required to close the sale. The state DFPI did not respond to an email seeking comment.

Either company could terminate the deal if it’s not consummated by Nov. 10, according to Intermex’s quarterly securities filing on Aug. 10.

The Intermex acquisition was announced a year ago as a way for Western Union to bolster its business in the Americas and to increase the company’s size. 

Western Union executives cited the Intermex closure delay in their July 30 earnings report as a contributing factor for margin pressure and earnings that were lower than expected.

“Competitive positioning in the space has primarily been driven by scale so adding volumes, all else equal, is a positive,” Morningstar analyst Brett Horn said Friday in an interview. “The negative is that you’re doubling down on the cash-based space, which is falling out of favor and seeing a decline.”

The sale was expected to close in the second quarter of 2026, Horn noted in a July 30 client report, which also called out “a material impact” on money transfers due to the Trump administration’s “aggressive efforts to reduce immigration.”

The U.S. political environment has played a role in the company’s travails, with the shift to digital cross-border payments happening faster than Western Union appears able to adapt, Horn said Friday. 

Beyond immigration enforcement actions at retail locations, the U.S. also imposed a 1% tax on cash remittances this year, further driving the digital transition, he noted.

“In the second quarter, these political issues kind of accelerated that shift to digital for them,” Horn said.

Another problem: Digital transfers generate lower revenue and income than cash transfers, Horn wrote in his report. Western Union’s second-quarter revenue of $1 billion dipped 1% from the same period last year, with net income dropping by 37% in the quarter.

The immediate problem for Western Union is that its digital growth is tepid, with branded digital revenue rising 7% in the second quarter – down from 9% the prior quarter – and 6% in the second quarter of 2025. 

“They were calling for (digital revenue) to accelerate and it just hasn’t,” Horn said. “It seems like they’re having trouble evolving with that shift.”

Likewise, Miami-based Intermex is facing similar challenges. Last week, the company reported a 17% drop in revenue for the first half of 2026, to $253 million, compared to 2025. Net income slid about 75% in that period from last year, to $4.72 million.

About 90% of Intermex’s revenue comes from retail locations, William Blair analyst Cristopher Kennedy wrote Friday in a client note on Western Union.

The firm has adopted “a cautious stance” on Western Union, Kennedy wrote, “as we believe executing change efforts across a global and over-175-year-old franchise will prove challenging.”

New York regulators focused their review on how Western Union’s absorption of Intermex would affect retail access and prices for customers sending cross-border remittances, according to a DFS press release.

The merged company would command “greater than 30%” market share for retail remittances from New York to six Latin American countries, according to the state’s agreement with the companies, signed Thursday.