World Bank has estimated that growth in remittance flows is expected to increase 8.4% per year over the next three years, raising the volume to an estimated $681 billion in 2016. The market is still dominated by MTOs, Global Tier 1 companies, such as The Western Union Company is a US financial services company with headquarters in Englewood, Colorado with offices and agents all over the world offering services such as money transfers (P2P, P2B and B2B, money orders, and other business & commercial services. With close to 12,000 employees, more than 500,000 agent locations in over 200 countries and territories, Western Union is... want more? (NYSE: WU) and MoneyGram (NASDAQ: MGI), and Tier 2 companies such as Xpress Money and RIA Envia, a division of Euronet (NASDAQ: EEFT). There are a large number of Tier 3 companies, some of them quite large in their own markets, such as Contact in the CIS countries, Xoom (NASDAQ: XOOM), Dolex and Viamericas in the US. On the payout side of the equation, the picture is not as clear with local banks being very active in certain markets, while abandoning the service in others. The mobile penetrations rates in the developing world and the success of MNOs providing money transfer services in a number of markets are challenging banks and MTOs. Plus the buzz over virtual currencies is growing louder and its underlying technology holds great promise for the industry.
Hugo Cuevas-Mohr, Director at IMTC, released a document this week entitled “Are Telcos, Money Transfer Companies (MTOs) and Banks on a Collision Course over Remittances?” that can be downloaded here. Cuevas-Mohr states: “IMTC is where all the remittance service providers that make part of this large heterogeneous family converge to discuss partnerships and the challenges and opportunities that exist in the different markets in the world. The Money Transfer Industry has been for years the largest international money transfer interconnector. The clashes in certain markets are making the regulators very concerned; but political clout and national interests are being voiced.” At the inaugural day of IMTC WORLD 2014 this document will be the basis of 4 days of interesting discussions.
But partnerships have been the name of the game in the remittance market; will they continue to be so? Are present and new “bridges” part of the solution?
Comments are welcomed in the Linkedin post.