Hugo Cuevas-Mohr puts together every year the 10 Most important Issues for the industry. To download the PDF go to Download/IMTC Publications.
Digital IMT&Ps are continuing to increase their market share as investors and bankers favor online/mobile channels. At IMTC WORLD 2015’s M&A roundtables, the message was clear: Investors and bankers are favoring digital channels, overwhelmingly, and not only is the valuation of digital money transfer companies very high, but there is very small interest in the investment world for investing in traditional agent-based MTOs.
Interestingly enough, we are seeing movement in the traditional sector with M&A being discussed, mostly for positioning purposes and increase in market share and geographical distribution. Traditional MTOs are increasingly looking at online/mobile solutions to expand this channel (RIA, Transfast, Uniteller, Moneydart) or bring them to market (Dolex, Xpress Money) and several mobile solution providers in the U.S. and Europe are seeking partners to use their technological innovations (Mobetize,, Moni, PayToo, and others).
A very recent whitepaper released by Amdocs and Juniper Research, entitled “Forget the Wires, Connect the Wallets,” provides interesting data on mobile remittance expectations, “More than 83 percent of respondents show a strong willingness to use their mobile phone as a means of sending money internationally. When current user base of money transfer operators (MTOs) is considered, this percentage rises to 92 percent, suggesting that a mobile offering, suitably priced and marketed could have a substantial disruptive effect.” It will be interesting to see Amdocs incursion in mobile remittances.
The increased adoption of these channels is creating a digital divide in the consumer base that needs to be investigated further (wealthier senders using low-cost channels). The two major challenges of the industry now are Fraud Prevention and finding reliable and knowledgeable merchant services providers willing to provide debit card processing.
One excellent report that that everyone in the IMT&Ps industry needs to read (presented in Issue #4 too) is entitled “Mobile payments in emerging markets: Where two dogs fight for a bone…” published in October 2015 by ROBECO. This report is intended for investors and a subtitle in page 2 is direct: Avoid incumbents offering remittance services and banks underinvesting in technology. A great quote from the report says: ” Mobile payment technology is disrupting the global remittance market. Incumbents such as MoneyGram and 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? have long benefited from strict regulations protecting their business model. Given that most remittance flows were cash-to-cash, there used to be little alternative. When mobile payments made their entrance the alternatives became abundant. Cash-to-cash is now being replaced by account-to-account and this has a big impact on fees. .”
The table in page 11 of the ROBECO Report with the most likely leader of mobile payments (MNOS, Banks, Fintech) in selected emerging markets is worth analyzing.
Continue reading The 10 Most Important Issues of the International Money Transfer & Payments Industry for 2015 in this Blog or To download the PDF go to Download/IMTC Publications.