3 Types of Remittance Companies Emerge as the $600 Billion Industry Gets Disrupted

Remittance came into even more focus for the rest of the financial world these past 5 years as more legacy money transfer companies noticed sustained behaviour in money transfer by consumers. One great trigger for this has been the rise of new models and players - fintech companies and concepts bringing innovation and lower costs by using electronic channels to deliver international money transfer. 

Image courtesy www.magnifymoney.com

We will take a quick look at 3 clear types that have evolved in the last 10 years.

Pure Electronic Channel Types

Companies like TransferWise, Xoom, Transferbee, RemitNow, TransferGo fall into this category. 

They deliver money transfer services strictly via digital and mobile channels.

One interesting thing about digital first remittance companies is the customer profile and their habits: 

For instance, according to Xoom, "Customers who use mobile are more valuable. 

Mobile customers send money more frequently and have higher retention rates than their desktop- only counterparts.

Image courtesy Business Insider Intelligence

BitCoin Remittance Types
It was only a matter of time that remittance would become another use for the popular yet unpopular crypto-currency called BitCoin.
 
In Nigeria, a company like BitStake emerged in 2015 testing the waters and offering a flat 1% on remittances done on its platform. However they seemed to have changed strategy and are now BitCoin4Africa. 

A few other options have also sprung up like NairaEx a bitcoin exchange in Nigeria. It will be interesting to see how the education process is developed to achieve significant level of adoption by Nigerians abroad and in Nigeria given that crypto-currencies are new and need to build trust amongst mainstream financial users.

    

If you are curious to know what the current value of a BitCoin is in Nigeria, well according to Google, for today, 1 Bitcoin equals 64511.23 Nigerian Naira:

Innovation Driven Legacy Type (Telecoms and Big Remittance Players)

In different countries, the role of telecoms as a mobile money player has been that of different strokes for different folks. In Kenya, M-Pesa famously opened the flood gates of mobile money as we know it thanks to Safaricom and it began to be used for remittance leading to partnerships with WorldRemit among others were made. Recently however, MoneyGram and Econet Wireless launched a new mobile money platform in Zimbabwe to make it easier for MoneyGram users to receive international money transfers through their mobile devices. 

    

WHO WINS THE BATTLE? 

At Pay2naija Money Blog, we think there will continue to be partnerships and maybe mergers and acquisition as more digital first platforms come onboard. Clearly though, 3 things are key for success in international money transfer: TRUST in the provider; EASE of use; COST of the service. These 3 factors will play a major role in deciding who the winners are.