Weekly Round-up (04 February – 10 March 2019)
Action continued in the international money transfers and fintech space during the week of 4-10 March with MasterCard announcing to drop its bid for Earthport, WorldFirst announcing acquisition of CurrencyVue, Revolute attracting some bad press and the UK’s FinTech body Innovate Finance launching an educational initiative. Meanwhile, Remittance and Fintech firms worldwide celebrated women’s contribution to fintech on the occasion of International Women’s Day last week.
Mastercard Drops Bid for UK’s Earthport, Agrees to Buy Transfast
Global payments giant Mastercard announced that its offer window to buy Earthport had lapsed, which potentially clears the way for rival Visa to make a bid for the British cross-border payments company. Earthport has been witness to a bidding battle between Mastercard and Visa since last December. The company, which had earlier backed Mastercard’s bid, most recently urged shareholders to accept Visa’s higher offer. Visa made a surprise £198m bid for Earthport over the festive season. But Mastercard tried to outbid its rival with its £233m bid, forcing Visa to return with an improved £247m package. Mastercard, meanwhile, has announced to enter into an agreement to acquire Transfast, a global cross-border account-to-account money transfer network. Transfast covers over 125 countries across Asia, Europe, Africa, Americas and Australia. Transfast is expected to complement Mastercard’s wide range of payment solutions by increasing worldwide connectivity in the account-to-account space, enhancing compliance capabilities and offering more robust foreign exchange tools.
WorldFirst’s CurrencyVue Takeover Signals B2B Payments Push
Payments fintech WorldFirst announced successful acquisition of the Australian CurrencyVue platform last week. CurrencyVue has been developing a unique platform that integrates with global ERP and well-known accounting systems to provide users with a real-time view of their international payments and currency exposures. The new capabilities will enable WorldFirst’s SME and online seller clients to integrate their international transactions and exposures with leading platforms such as Xero, Netsuite and Quickbooks. The platform also enables businesses to automate payments of foreign currency invoices. The integration of CurrencyVue’s platform means businesses will have access to a holistic view of their finances, including foreign exchange commitments, and an ability to manage these through direct access to WorldFirst’s hedging products. WorldFirst itself has been acquired by Ant Financial in a US$700m deal last month.
Revolut Hit by Slew of Negative News
Revolut, the UK money-transfer fintech unicorn, hit the headlines for all the wrong reasons last week.
In early March, Revolut confirmed that its CFO Peter O’Higgins had resigned after a Daily Telegraph report revealed that the fintech switched off an AML system. As a result, thousands of transactions reportedly passed through Revolute’s digital banking system without having been fully checked for sanctions compliance. However, Revolut denied the report saying this was part of a “systems enhancement project” being tested in parallel with other compliance controls.
In another news, the London Police reportedly received a complaint from a Revolut customer about the length of time it took to transfer £70,000 after bank details were incorrectly entered at the payment stage. However, Revolut said that there is no fraud investigation being undertaken by the police.
Also, claims that Revolut has links with the Russian government have been reportedly causing controversy in Lithuania. Lithuanian parliament’s budget and finance committee has accused Revolut of being involved with the Kremlin. However, the Revolut CEO has denied that his company has links to the Kremlin.
Meanwhile, Wired magazine ran a feature on what it called “the human cost” of Revolut’s rise. The story detailed people being asked to work for free as part of job applications, excessively long hours, a culture of “hitting targets at all costs”, and high staff turnover. Revolut pushed back saying that it has already addressed the issues raised in the Wired article, and “the allegations in the media over the past week are not an accurate reflection of the company that we are today.”
UK FinTech Body Launches “FinTech for Schools” Initiative
Innovate Finance, an advocacy group for the UK Fintech industry, launched the “FinTech for Schools Initiative,” last week, seeking to inspire the next generation of Fintech leaders innovators. FinTech for Schools is an important piece of Innovate Finance’s Skills and Talent work, which aims to support a future domestic pipeline of talent as well as showcasing the various skills initiatives of its members in one, easily accessible place during a challenging time politically as Brexit nears. The FinTech for Schools campaign is designed to encourage young people to understand the increasing importance of digital skills in the workplace, with an emphasis on ensuring the sector is appealing to girls. Approx 76,000 people are employed in the UK fintech sector and there are 1,600 UK companies. Out of that, 42% of the workforce is from overseas. However, only 6% of UK deals had a female founder – and that represented a mere 3% of total capital invested in UK fintech in 2018.
Women in Fintech
On the occasion of the International Women’s Day (IWD) on 8th March last week, fintech firms and associations across the globe took stock of contribution of women in Fintech universe while promising to do more for them.
A study commissioned by WorldRemit showed that the gender gap among senders of remittances to the Philippines narrowed in the last four years, even as female overseas Filipino workers (OFW) tend to earn less than males. The survey showed that the number of female OFWs who sent money home made up 35% of WorldRemit’s clients in 2018, up from just a 25% share in 2014. InstaReM revealed that migrant women in the UK, despite being the primary source of care for their families back home, pay up to 20% more than men to transfer money abroad.
Aside from the gender pay gap, women also face other challenges. Female entrepreneurs often have problems accessing mentorship and even have a difficult time looking for venture capital. Innovate Finance’s annual Venture Capital Investment Report revealed that female founders make up just 17% of Fintech companies and only 3% of the $1.7b UK VC FinTech investments made in 2018 went to businesses with a female founder. Global payments fintech PayPal noted that women make up nearly half the American workforce and are steadily outpacing men in educational achievements and entrepreneurship, and the number of women-owned firms grew 45% between 2007 and 2016, a rate five times faster than the national average. Meanwhile, 20 women in the India’s Fintech industry were awarded the ‘Women in FinTech Awards (WIFA)’ as part of the third edition of fintech conclave ‘Fintegrate Zone’ in Mumbai. The WIFA aspires to raise awareness around women’s contribution to the ecosystem, and to encourage more women to bring a real change.
Listen to our January 2019 Fintech Monthly Podcast here.
Weekly Round-up (28 January – 03 February 2019)
The week of 28 January-3 February 2019 saw continued action in the international money transfers and fintech space with InstaReM joining Visa’s fintech fast-track program, UK money transfer start-up WorldFirst shutting down its US operations and Western Union introducing digital money transfer service in South Korea. Updates on Ripple were mixed with Japanese finance giant SBI Holdings recognizing Ripple’s potential for cross-border payments, while the rival SWIFT announcing partnership with blockchain start-up R3. In other updates, venture capital investments in Fintech rocketed 120% to US$ 39.57 bn in 2018, according to a CB Insights report. Remittances to Mexico, meanwhile, hit a record high in 2018.
InstaReM Joins Visa Fintech Fast Track Program
InstaReM announced last week that it is joining the global payments technology major Visa’s Fintech fast-track program in the Asia-Pacific region. This program makes it quicker and easier for InstaReM to build and deliver new commerce experiences on Visa’s payments network. As part of the Visa fintech fast-track, the two companies will wListen to our January 2019 Fintech Monthly Podcast here.ork together to build new solutions for moving money to and from different countries in fast, convenient ways that aim to provide users with seamless digital payments and money transfer experiences. The Visa fintech fast-track program makes it easier for fintechs to access the global Visa payments network. The program is part of Visa’s global strategy to open up our network and support a broad range of players that are developing new commerce experiences.
WorldFirst Shifts US Operations to Save Ant Financial Deal
UK-based remittance fintech startup WorldFirst is shutting its US operations to ward off a potential regulatory hurdle for its planned takeover by China’s Ant Financial Services Group, the Financial Times reported last week. Many Amazon sellers received the notice last week from WorldFirst, the company they rely on for international money transfers, that it will stop offering all services in the US after Feb. 20. According to FT, WorldFirst’s US operations will be rebranded as Omega and it will operate independently of World First Group. The US in recent years has blocked many proposed Chinese investments in American companies in an effort to stop China from acquiring important technologies.
Western Union Introduces Digital Remittance Service in South Korea
Global money transfer giant Western Union and kakaobank, the largest mobile-first bank in South Korea, announced the launch of Western Union digital money transfer services within kakaobank’s mobile app last week. With the integration of Western Union’s cross-border functionalities with kakaobank’s mobile banking app, over 7.6 mn kakaobank customers will be able to send and receive international money transfers directly from their mobile phones. Western Union continues to focus on Digital, having spent enormous resources on building and improving their mobile app and on technologies such as artificial intelligence and yet maintains a laser-like focus on its customers.
SBI Recognizes Ripple’s Potential for Cross-Border Payments
In its nine-month financial report last week, Japanese finance giant SBI Holdings talked about the capacity of Ripple XRP for cross-border payments. In order to attain international levels for activities such as international payments, trade finance, and related large scale transactions, Ripple and blockchain consortium R3 are the main ingredients of the Japanese SBI’s strategy. As a part of the strategy to enable a fintech shift, SBI also mentions its new blockchain initiative S coin platform, which it trialed for retail payments in September 2018.
Swift CEO Announces Tie-up with Blockchain Start-up R3
Swift, the global, banks-owned financial messaging service, is partnering with blockchain start-up R3. At a panel session at the Paris Fintech Forum on last week, Gottfried Leibbrandt, Swift’s chief executive, announced that Swift would link R3′s platform with its new payments standards framework GPI, or Global Payments Innovation. According to Swift, individuals using the R3 platform can authorize payments through GPI Link. The users’ banks can now settle GPI payments. Swift’s financial messaging service is being used by top banks across the world, however, Ripple has vowed to show most of SWIFT’s customers the best way to perform an immediate seamless transaction.
Fintech Companies Raised a Record US$ 39.6 bn in 2018: Report
Venture capital-backed financial technology companies raised a record US$ 39.57 bn from investors globally in 2018, up 120% from the previous year, according to research by CB Insights. Funding was raised through 1,707 deals, up from 1,480 in 2017. The surge in funding was due in large part to 52 mega-rounds, or investments larger than US$ 100 mn, which were worth US$ 24.88 bn combined, according to the research. A US$ 14 bn investment in Ant Financial – the payment affiliate of Chinese e-commerce giant Alibaba Group Holding – alone accounted for 35% of total fintech funding last year. In the last three months of 2018, five companies, including credit card provider Brex, digital bank Monzo and data aggregator Plaid, joined the ranks of fintech “unicorns”, the companies valued at US$1 bn+.
Remittances to Mexico Hit Record High in 2018
Overseas Mexicans sent US$ 33.481 bn to their home country last year, setting a new record of annual remittance into the country, the Central Bank of Mexico (Banxico) announced last week. For the second straight year, remittances grew by double digits, surpassing the 2017 total of US$ 30.291 bn dollars, according to Banxico. A large part of the remittances (US$ 32.695 bn) were sent via electronic transfer, according to the report. In a separate report, Banorte, a Mexican financial group, believes the flow of remittances could go down this year, citing signs of lower economic activity in the United States, a key origin of remittances.
Listen to our January 2019 Fintech Monthly Podcast here.
Weekly Round-up (21 January – 27 January 2019)
Action continued in the Fintech and International Money Transfers space during the week of 21-to-27 January 2019, with formation of the Fintech Cooperation Committee in Singapore, reports of MoneyGram exploring options including a potential sale, Mastercard outbidding Visa’s offer to buy Earthport, London fintech Marketinvoice receiving £56mn in funding led by Barclays and Santander, SamsungPay announcing to include foreign wire transfer function, and more banks expressing interest in the RippleNet. Workers’ remittances, meanwhile, continue to pour into the Indian subcontinent.
Financial Firms Form FinTech Cooperation Committee in Asia
A new pan-Asia network for fintech players was launched in Singapore last week, bringing together Asian fintech start-ups, financial institutions and banks to trade knowledge and expertise in the booming fintech industry. The new Fintech Cooperation Committee is designed serve as a platform for industry players to share the best industry practices with each other, hold regional high-level forums and coordinate policies that can further the fintech ecosystem. At its launch, around 60 financial institutions from 12 countries and regions have joined the new committee, including banks, insurance companies, securities and asset management firms, and financial education institutions. PYMNTS.com noted that among the startups in Singapore’s burgeoning FinTech scene is InstaReM, which seeks to use online and mobile platforms to disrupt the traditional cross-border remittances business.
MoneyGram Exploring Options, Including Potential Sale
Reuters reported last week that MoneyGram is exploring strategic alternatives, including a sale of the money transfer company, a year after the US government rejected its US$1.2 bn sale to China’s Ant Financial. In November, the company had to deal with a US$125 mn financial penalty from US regulators for failing to crack down on fraudulent money transfers. While declining to comment on the company’s sale process, a MoneyGram spokeswoman reiterated that the company is focused on refinancing its debt. Reuters’ sources said that a sale of the company is not certain and the deliberations are confidential. MoneyGram is currently rolling out a mobile app and transaction alerts through text messages and emails to give customers options beyond brick-and-mortar locations. In addition, the company has started spending more money on spotting suspicious wire transfers, which includes collecting identification from customers on nearly every transaction as opposed to just larger ones.
Mastercard Tops Visa’s Offer to Buy British Payments Firm Earthport
US-based Mastercard Inc made a £233 mn (US$ 305 mn) bid to take over payments firm, Earthport Plc last week, as it looks to head off rival Visa Inc’s attempts to buy the British company. Mastercard’s offer is at a 10% premium to Visa’s £198 million offer. Visa responded to the development saying that it would consider its options, without giving further details. Visa made a surprise £198 mn bid for Earthport during the festive season. Under the agreement, which will be subject to the conditions and further terms, Earthport shareholders will be entitled to receive 33 pence in cash for each Earthport.
Barclays and Santander invest in MarketInvoice
British lending startup MarketInvoice said last week that it secured £56 mn (US$72 mn) in a mix of equity and debt funding from investors, led by British bank Barclays and the VC arm of Spanish lender Santander, as well as a £30 million debt facility from Viola Credit, the lending fund of Israeli private equity firm Viola Group. The London-based fintech firm lets small-to-medium enterprises sell their unpaid invoices through an online platform to gain access to working capital loans. The series B-stage equity funding, which amounted to £26mn, also received significant participation from European VC firm Northzone, which has backed the likes of Spotify, Trustpilot and fintech lender Zopa. MarketInvoice funds invoices and business loans to UK companies worth more than £2 bn, making it Europe’s largest online invoice finance platform.
SamsungPay to Include Foreign Wire Transfer Function
South Korea’s Samsung Electronics is planning to start foreign currency wire transfer service through SamsungPay at the end of this month and it is targeting major countries where there are many foreign exchange students. It is planning to link its APIs (Application Programming Interface) with two startup companies and install this wire transfer function to SamsungPay, before increasing the number of partners in the future. SamsungPay will be installed with outward wire transfer function that sends money from South Korea to foreign countries.
More Banks Exploring RippleNet
The Saudi British Bank (SABB), the third largest bank in Saudia Arabia, said it’s Ripple-powered instant cross-border payment pilot is live now. SABB is one of three banks to get the go-ahead from the country’s central bank to test Ripple’s technology. The bank is pushing to offer its customers instant international payments as soon as possible. Ripple’s global head of infrastructure innovation Dilip Rao said Ripple is rapidly expanding its presence in the Middle East.
Meanwhile, Flash FX, an international money transfer company in Australia, is leveraging ripple ‘to phase out traditional FX liquidity and SWIFT payment network’. In its latest conversation on Social Media, the firm indicated its future plan of enabling ‘off-ledger payments’. The firm has been using Ripple for payment for 2 years for on-ledger payments, and will eventually enable off-ledger payments. Although FlashFX’s preference on Ripple’s product is still out of sight, the team notes during the conversation that it is technically using the RippleNet.
Remittances Continue to Pour into Indian Sub-Continent
Thomas Abraham, chairman of the US-based Global Organisation of People of Indian Origin (GOPIO), said at its 30th annual convention last week that the People of Indian Origin send home about US$ 70 bn in remittances annually which has helped India build a forex kitty of over US$ 400 bn and boosted its economic prowess in the world. Remittances to the neighbouring Bangladesh stood at US$1.7 bn in the first 18 days of January, giving a boost to the country’s foreign currency reserves as well, according to the Bangladesh Bank. Money sent by more than 10 mn non-resident Bangladeshis makes up about 12% of Bangladesh’s GDP. Meanwhile, Nepal received 32% more remittances at NPR 376.59 bn, even though the number of labourers abroad declined by around 40% in the first five month of the current fiscal year, a report published by the Central Bank of Nepal said.
Weekly Round-up (14 January – 20 January 2019)
The week of 14th to 20th January 2019 saw some interesting updates coming from fintech and international money transfer space with US financial services company Fiserv announcing to buy payment processor First Data in a US$ 22 billion deal, American fintech Square announcing a new debit card for small and medium businesses, UK-based WorldRemit launching its digital money transfer service in South Africa, Western Union launching a co-located money transfer services at Singapore worker dormitories, and Ebixcash announcing acquisitions of Essel Forex and Weizmann Forex. Crypto major Ripple showcased the differences with SWIFT and pushed for XRP-based real-time international payments. Meanwhile, remittances to the Philippines witnessed a slowdown in November.
Fiserv to Acquire First Data for US$ 22 bn
US-based provider of financial services technology Fiserv will acquire First Data in an all-stock deal with a value of about US$ 22 bn that will combine two of the financial services industry’s largest technology and processing companies. The deal brings together two financial industry behemoths: a core banking vendor with 12,000 financial institution customers and a payment processing and technology provider with 4,000 financial institution clients. Following the merger, Fiserv CEO Jeffery Yabuki will become CEO of the combined entity, while First Data’s CEO Frank Bisignano will become President and COO.
Square Launches Debit Card for SMBs
US-based payments fintech Square announced a debit card for businesses last week that lets its Small & Medium Business (SMB) users using its credit card processor get immediate access to money from sales. The product, called Square Card, will allow businesses to withdraw and spend the money they’re bringing in through Square payments. Traditionally, Square’s SMB users would have to transfer their balance to a regular bank account in order to use it, which often took days. The new debit card gives Square merchants the ability to use the money that comes into their Square account immediately without having to pay extra.
WorldRemit Launches Cheap Digital Money Transfers from SA
UK-based digital money transfer service WorldRemit launched its low-cost digital money transfer service from South Africa to over 145 destinations worldwide. Using the WorldRemit app or website, customers can now easily send money to global destinations including Zimbabwe, Mozambique, the UK, India and Pakistan. Senders can opt for multiple pay-out options such as bank transfer, cash pick up as well as mobile money. Andrew Stewart, WorldRemit’s managing director for Middle East and Africa, said South Africa was one of WorldRemit’s top ten remittance receiving countries, with transactions to the country growing by more than 50% year-on-year. Meanwhile, Bloomberg reported that WorldRemit plans a new funding round in the next six months ahead of a potential initial public offering or buyout.
Western Union, Travelex Bring Services to Singapore Dormitories
Remittance giant Western Union has partnered with Travelex, an independent foreign exchange and remittance business, to co-locate its money transfer services within five worker dormitories. The collaboration will see Western Union services co-located within five dormitories in Simpang, Mandai, Choa Chu Kang, Penjuru and Jalan Papan, providing choices for customers to send money directly into bank accounts across the globe or receive in person via the company’s more than half a million retail agent locations. With the addition of Travelex locations, Western Union’s retail agent network will increase to 80 locations, facilitating convenient access across Singapore.
Also Read: 8 Reasons To Study In Singapore
Ebixcash to Acquire Essel Forex, Weizmann Forex for US$57.35 mn
Nasdaq-listed Ebixcash said last week that it will acquire Essel Forex and Weizmann Forex for US$ 57.35 mn to cement its position in the financial services distribution. Ebixcash World Money has entered into an agreement to acquire a controlling 74.84% stake in India-based Weizmann Forex at an enterprise valuation of US$ 65.94 mn, and acquire 100% assets of Essel Forex for approximately US$ 8 mn. Upon completion of these acquisitions, Essel and Weizmann Forex will be integrated into the EbixCash World Money business in India. Ebix would fund the entire transaction in cash, using its internal cash reserves.
Ripple Highlights Differences with Swift, Says Real-Time Remittances Should Be Global Standard
Ripple highlighted the main differences between its payment platform and the global payment traditional network SWIFT. SWIFT is the current global standard from cross-border payments, and according to the company, it currently links more than 11,000 banks and financial institutions around the world. At the Shift Money fintech conference in Croatia last week, Ripple sales director, Ross D’Arcy said he believes the system has too much power to determine the outcome of each individual transaction. Furthermore, Ripple is working in order to make payments in a very easy way. The intention is to make users feel they are sending an email. SWIFT is currently developing a new payments API that boosts speed and reduces errors on the network.
The Philippines’ Remittance Growth Slows in November
Money sent home by overseas Filipino workers (OFWs) grew in November 2019, according to data released by the Bangko Sentral ng Pilipinas last week. Remittances to the Philippines totaled US$2.326 bn in November, increasing by 2.8% from the US$2.262 bn recorded in November 2017, even as they slipped from the US$2.474 bn sent by OFWs in October 2018, which recorded an 8.7% growth. Personal remittances consisting of cash and non-cash items that flow through both formal or via electronic wire and informal channels such as money or goods carried across borders rose by nearly 3% to US$29.06 bn from January to November last year compared to US$28.24 bn in the same period in 2017.
Weekly Round-up (07 January – 13 January 2019)
The week of 6-13 January 2019 saw some interesting announcements in the international remittances and global fintech space. With a fresh US$ 300 mn investment round, Germany’s challenger bank N26 became the most valuable fintech company in Europe. Singtel’s Dash announced expanding its mobile remittance services to Myanmar. Kuwait Finance House announced to start using an instant cross-border remittance service based on Ripple’s technology. UK’s PaySend launched an option to send money internationally using just the recipient’s mobile number. India’s ICICI Bank launched a loyalty program for remittances from the US. TransferWise opened an office and applied for a banking license in Belgium. And Pakistan’s Telenor Microfinance Bank and Malaysia’s Valyou announced partnership to offer cross-border remittance service between Malaysia and Pakistan.
N26 Becomes Europe’s Most Valuable Fintech Startup
German digital bank N26 has become Europe’s most-valued non-listed fintech startup following a US$ 300 mn fundraising round that prices the company at US$ 2.7 bn. The company now plans to launch its mobile-banking app in the US. The Series D round was led by the NY-based VC and PE firm Insight Venture Partners, with participation from GIC, Singapore’s sovereign wealth fund, and several existing investors. So far, N26 has raised US$ 500 mn+ from investors including Tencent, Allianz X, Peter Thiel’s Valar Ventures, Li Ka-Shing’s Horizons Ventures, Earlybird Venture Capital, Redalpine Ventures and Greyhound Capital. The latest financing comes just 10 months after a US$ 160 mn Series C round. According to CB Insights data, just six other privately-held European firms claim to top N26′s market value: Global Switch, Roivant Sciences, Auto1 Group, Ottobock, The Hut Group and BGL Group.
Singtel to Expand Dash Remittances to Myanmar
Singapore-based users of Singtel’s mobile payments platform Dash will be able to send money to Myanmar by March, thanks to a new agreement between the telco and the United Nations Capital Development Fund (UNCDF). Singtel inked a three-year partnership with UNCDF last week to launch and promote affordable remittance for the over 180,000 Myanmar nationals in Singapore. UNCDF’s shaping inclusive finance transformations (SHIFT) program aims to increase access to formal and legitimate remittance channels in Myanmar. According to World Bank, Myanmar nationals working abroad sent home some US$ 6.2 bn (S$ 8.4 bn) in 2017.
Kuwait Finance House Joins Ripplenet for Money Transfers
Kuwait Finance House (KFH), one of the largest Islamic Banks in the world, announced the launch of a new remittance service last week that leverages Ripple’s technology. The new service is called Instant International Transfer and it would allow users to send Saudi Riyal (SAR) with customers using the Al Rajhi Bank. The service, which allows KFH customers to make instant and secure zero fees remittances through their accounts at kfh.com, will expand to more countries in different currencies.
Paysend Rolls Out ‘PaySendLink’
UK-based payments distributor PaySend has launched an option for consumers to send money internationally using just the recipient’s mobile phone number. The new service, called PaySendLink, aims to bypass Swift, IBAN, and sort codes, as well as account numbers, by “streamlining its users’ experience” and offering a simpler and secure way for people to transact. All registered customers using the firm’s website or mobile app can gain access to the service dubbed PaySendLink. The new service will enable recipients to view the incoming transfer and direct it to Visa, MasterCard, UnionPay card or a bank account. PaySend has the only global card-to-card money transfer network and currently operates in over 70 countries worldwide.
ICICI Bank Launches Loyalty Program for Remittances from US
India’s ICICI Bank has announced the launch of a loyalty program for customers of Money2India (M2I), based in the US. Titled ‘M2I Rewards’, it is a tier-based program that offers preferential forex rates to customers for transferring funds to India. One of the key highlights of this Money2India program is that it allows customers to remit money using social media platforms like WhatsApp, Siri and even e-mail. ICICI Bank is first Indian bank to introduce a loyalty program for its remittances service. The program categorizes M2I customers into 4 tiers on the basis of the frequency and value of transactions that the customer undertakes. Based on the tier, customers will enjoy the benefit of exclusive preferential rates, wherein higher tiers will attract a better exchange rate than the standard card rate offered by the Bank.
TransferWise Applying for Banking License in Brussels
London-based fintech startup TransferWise is applying for a money-transfer license in Brussels, in a bid to ensure its business is not disrupted if Britain crashes out of the EU without a divorce deal. Brussels will become the tenth location TransferWise has opened an office in. One of the definite benefits of EU membership, and something that has undoubtedly benefited UK fintech startups, is “passporting” of financial services, which means a certain level of financial regulatory harmony across the EU and means that companies authorized in any EU state can offer their services freely in any other, and with minimal additional authorization.
Blockchain-Based Remittance Service Launched Between Pakistan and Malaysia
Telecom giant Telenor’s Pakistani subsidiary Telenor Microfinance Bank and Valyou, a fintech subsidiary of Telenor in Malaysia, have launched a blockchain-powered cross-border remittance service based on blockchain technology developed by Alibaba affiliate, Alipay. Pakistan’s first blockchain-based remittance service aims to eliminate intermediary costs making it cheaper to send money. Users will also be able to track the remittances at ‘every step of the way’. It is estimated that Pakistanis living and working in Malaysia send around US$1 bn annually, which is about 5% of the estimated US$ 20 bn in remittances that Pakistan received last year.
Weekly Round-up (31 December 2018 – 06 January 2019)
The first week of 2019 started on an optimistic note with expectations of new developments and new breakthroughs in international remittances and fintech universe. Notably, the battle for the dominance in global cross-border payments infrastructure between SWIFT and Ripple intensified with SWIFT launching a solution to challenge the Blockchain, while Ripple CMO reiterating that “Ripple is meant to be a replacement for SWIFT”. Among other updates of the week, the National Bank of Kuwait launched SWIFT’s global payments innovation (gpi) with the ACI Worldwide’s payment engine, Facebook is reportedly developing crypto Stablecoin targeting remittance market in India and Japanese fintech Atom announced entering the remittance industry in 2019. Migrant remittances, meanwhile, continued to show an upward trend.
SWIFT-Ripple Battle Intensifies
The battle for supremacy in the global cross-border payments infrastructure between traditional payment network SWIFT and cryptocurrency disruptor Ripple intensified as the New Year set in. In a new video shared by a Twitter user Steven Diep, Ripple’s chief marketing executive, Cory Johnson clarified that Ripple intends to offer a product that competes with SWIFT and eventually replaces it. Cory Johnson reiterated Ripple CEO Brad Garlinghouse’s statement, saying ‘Ripple is meant to replace SWIFT’ since the cost and time involved in transferring the money or funds are quicker than SWIFT network that takes 3 to 5 days. Last month, SWIFT announced the launch of ‘integrated payment validation’ which appears as the firm’s approach to compete with Fintechs and emerging Blockchain solutions companies. As SWIFT is using Hyperledger technology to develop its own blockchain-based solution, a partnership with Ripple is seen as unnecessary for the financial services giant.
ACI Worldwide Plugs National Bank of Kuwait into Swift’s gpi
ACI Worldwide, a leading global provider of real-time electronic payment and banking solutions, announced last week that National Bank of Kuwait (NBK) has successfully launched SWIFT Global Payments Innovation (gpi) services for its customers, utilizing the built-in gpi capabilities that are integrated into ACI’s flexible, global payments engine. Through this implementation, the bank now allows its customers to execute same day transfer and use of funds, with reduced timelines and greater transparency. ACI Worldwide has become the first certified vendor of SWIFT’s GPI solutions which would allow its partner NBK to directly plug into the SWIFT’s database to monitor inbound and outbound GPI transactions. Earlier, NBK had launched a product “NBK Direct Remit,” a blockchain-based product which uses RippleNet for cross-border payments from within the GCC region.
Facebook to Enter Remittance Market?
Facebook is reportedly working on a cryptocurrency for global payments on its WhatsApp messaging app. The project will first focus on the Indian remittances market. According to a bloomberg report last month, Facebook is developing a stablecoin, a cryptocurrency pegged to a fiat currency, though the firm is still far from releasing it as it’s still working on the strategy, including plan for custody assets, or regular currencies that would be held to protect the value of the cryptocurrency. Reports state that Facebook will initially focus on all related developments in India where there are 200 mn+ WhatsApp users. The country is also big in remittances having received US$ 69 bn in 2017. Observers add that if the news is true, Facebook will be making a lot of money from its new crypto deal and the remittance service that is rumoured to be launched in 2019.
Atom to Enter Remittance Universe
Atom Solutions, a Fintech company located in Japan, will launch their newly developed world’s lowest overseas remittances fee service starting March 1st 2019. The service is applied with unique wallet system which is different from traditional bank remittance services such as SWIFT or Correspondent Bank. Initially, the service will be available between South Korea and the Philippines during its initial stage. Filipinos working in the country will be able to use the new app to transfer money internationally at affordable overseas transfer rates, Atom Solutions executives said. The launch is scheduled for March this year. The firm said that there are limits to offering low-cost remittances if transaction is carried out through traditional banks. However, using cryptocurrency may lead to value loss on conversions to fiat currency and vice versa.
Migrant Remittances Continue to Rise
Migrant remittances continued to grow at a rapid clip in a number of corridors, as updates from the different countries suggest. Expatriate Bangladeshis sent US$ 7.5 bn remittances during the first six months of fiscal 2018-19, which is apparent 8.06% higher than the same period of the preceding year, according to Bangladesh Bank. Annual remittance hit an all-time high of US$ 15.53 bn in 2018, giving a breather to the country’s ongoing foreign exchange crisis. Meanwhile, migrants sent US$ 53.4 bn in remittances back to Mexico and Central America in 2018, or more than double the cost of building a border barrier on the U.S.-Mexico border, according to a World Bank report.
Weekly Round-up (24 December – 30 December 2018)
Action continued in the international money transfers and fintech universe as 2018 came to close. Talks of a couple of high profile mergers dominated conversations in the remittance space with Chinese fintech giant Ant Financial offering to buy UK-based currency exchange firm WorldFirst and payments giant Visa offering to buy money transfer firm Earthport. While crypto giant Ripple added National Bank of Kuwait to its growing RippleNet network, diverging views emerged on application of cryptocurrencies. On one hand, Payoneer CEO said that the chances of a single global non-fiat currency like Bitcoin is unrealistic, and on the other, a report indicated that the usage of decentralised currency is on a rise in the US in the remittance space. Japanese cryptocurrency firm Atom Solutions announced plans to launch low-cost remittance service next year. Meanwhile, remittances to Asia continued to rise on the back of strong US dollar.
Alibaba’s Ant Financial in Talks to Buy WorldFirst
Sky News reported last week that the Ant Financial, the payments group affiliated to Alibaba, China’s biggest internet company, is in advanced talks about a US$700 mn (£550mn) takeover of WorldFirst, a British currency exchange start-up. If completed, a takeover, could come within weeks, which would represent the most significant foray to date by a Chinese technology company into the UK’s burgeoning fintech sector. A takeover by Ant Financial of WorldFirst would underline China’s increasing financial muscle in areas of the global economy such as payments infrastructure. The Financial Times said that if a deal with WorldFirst is inked, it would mark a big test for Ant Financial, which has had trouble expanding. Earlier this year, Ant Financial’s $1.2 billion deal to acquire MoneyGram, was aborted, which would have given Ant a big presence in payments in the U.S.
Visa to buy British Payments Firm Earthport
In another acquisition news in the payments space, US-based Visa is reportedly paying £198 mn (US$ 250.6 mn) to buy Earthport, a UK firm that facilitates international transactions for banks and businesses. Earthport offers a lower-cost alternative to traditional payments systems by allowing banks and money transfer firms to have a single relationship instead of multiple ties with various payments channels around the world. For Visa, cross-border payments represent a growing business. The volume of such payments rose 10% in the 2018 fiscal year, Visa said in October. Earthport said Visa’s offer was a revised proposal that followed an indicative offer from the US company last month.
Kuwait National Bank Launches NBK Direct Remit via RippleNet
The National Bank of Kuwait (NBK), Kuwait’s largest financial institution, announced last week that it will incorporate RippleNet blockchain into its online banking platform, offering 24-hour wire transfers to Jordan, with more countries being added soon. Through NBK Direct Remit, customers can have access to fast cross-border money transfer solutions 24/7. By adopting RippleNet’s technology, the bank plans to launch even further solutions to meet the growing demand of its customer base. Due to its feature of instant cross-border payments through RippleNet, Ripple has been one of the most adopted platforms around the world. It already has a wide acceptance across businesses around the world.
Cryptocurrencies on the Rise in Remittance Transactions: Report
A new report by a blockchain-focused research company asserts that there has been a spike in people using cryptocurrencies to send remittances. This growth is in part due to the high costs incurred when using more traditional methods such as Paypal. According to a recent study titled, “Sending money back home: Worldwide methods people use to transfer funds,” by the blockchain startup Clovr, 15% of Americans now use cryptocurrencies to send money abroad. According to data from the World Bank, in 2017 along over $148 billion was sent overseas from the United States. Clovr surveyed 707 people, of which 15.8% had used virtual currencies to send remittances back to their countries. Based on the above share, Clovr pegged cryptocurrencies to be behind three other forms of cross-border remittance systems i.e. online services, money transfer series and traditional wire transfer.
Payoneer CEO Calls Single Currency Bitcoin Unrealistic
With the crypto markets looking to close out the year on a relative positive note despite 2018’s bear cycle, the views on cryptocurrencies continue to be divisive. Speaking to CNBC last week, Scott Galit, CEO of US-based payment processing firm Payoneer, made the claim that a single global non-fiat currency like Bitcoin was unrealistic. “Despite the interests of lots of people out there in the Internet world who love the idea of frictionless commerce and frictionless money and avoiding fiat currencies, I don’t see it.” Galit told CNBC Make It of the idea of a future single global currency. He also stressed the fact the government would never accept the fact that taxes are paid in Bitcoin because that would mean the government’s money would be subject to the exchange rate fluctuations of that digital currency.
Japanese Fintech Looks to Enter Remittance Market in 2019
Tokyo-based cryptocurrency firm Atom Solutions is planning to launch low-cost remittance service in March 2019. The service is applied with unique wallet system which is different from traditional bank remittance services. Initially, the service will be available between South Korea and the Philippines during its initial stage. However, Atom Solutions is aiming to expand the service over 10 countries in the year 2019. The remittance rate will be 0.5% above the interbank Transfer Middle Rate, according to the announcement. The service will have a sending fee of about five cents.
Remittances Continue to Grow in Asia
Personal and cash remittances continued to grow at a rapid clip in a number of Asian corridors, as updates from the different countries suggest. A Philippines congressman, Leyte Rep. Henry Ong, said last week that remittances remained on track to reach US$ 31 billion in 2018. According to the State Committee for Overseas Vietnamese Affairs, overseas remittances to Vietnam increase 10-15% during the last 12 years. Data from WB shows that it neared US$15.9 bn in 2018, equivalent to 6.6% of the country’s GDP. Sri Lankan expats sent home earnings worth of US$ 599 mn in October, an increase of 9.7% year-on-year, compared to US$ 538 mn in the same month last year. Meanwhile, remittance inflows into Nepal jumped 36.4% to NPR 312.26 bn in the first four months of the current fiscal year.
Listen to our November 2018 Fintech Monthly Podcast here.
Weekly Round-up (17 December – 23 December 2018)
Action continued in the international money transfers and fintech universe towards the end of 2018, which has been an eventful year for the sector. InstaReM announced a new feature to its money transfer platform that enables the SMB clients to make multi-currency payments in one go. There were reports of Facebook working on a cryptocurrency that would let users transfer money on WhatsApp, focusing first on the remittances market in India. Among other updates, while remittances continued to grow in Asia, Western Union launched its mobile app in Singapore, and said it has been watching the crypto space and global crypto adoption, TransferMate announced acquiring Swiss-based FX payments company Devisenwerk, and fintech Robinhood backed from an offer that appeared too good to be true.
InstaReM Unveils Multi-Currency Payments Feature
Singapore-headquartered cross-border payments firm InstaReM has added the new multi-currency feature to its remittance platform, which will enable SMEs to make payments in multiple currencies at once. Users making regular overseas payments to vendors, suppliers, and service providers, can now do so more quickly, transparently and at Zero-Margin FX Rates with the platform. With the ability to set up multiple transactions in one go, a business user can now make transfers to multiple beneficiaries in multiple currencies at the click of a button. To avail InstaReM’s multi-currency feature, a business would need to set up transfers to multiple recipients in the local currency.
Facebook Developing Crypto Solution for Money Transfer on WhatsApp: Reports
Bloomberg reported last week that the social media giant Facebook Inc. is working on making a cryptocurrency that will let users transfer money on its WhatsApp messaging app, focusing first on the remittance market in India. According to the report Facebook is working on a stablecoin — a cryptocurrency pegged to the U.S. dollar — and plans to make it available to WhatsApp users. The report further states that the company is working on the strategy, including a plan for custody assets, or regular currencies that would be held to protect the value of the stablecoin. If the U.S. giant carries out the reported plan, it would be the largest company to embrace consumer blockchain service.
Remittances Continue to Grow in Asia
Personal and cash remittances continued to grow at a rapid clip in a number of Asian corridors, as updates from the different countries suggest. Remittances to The Philippines recorded their fastest growth in six months, rising by 8% at US$ 2.76 bn in October (from US$ 2.55 bn in October last year) as overseas Filipinos sent more money back home ahead of the Christmas holidays, the Bangko Sentral ng Pilipinas reported last week. According to the Central Bank of Myanmar, between April 2016 to June 2018, remittances by nearly 1.5 million migrant workers hit US$ 1,428.468 mn. Meanwhile, Bangladeshi expatriates sent US$3.87 billion in remittances during the first quarter of the current fiscal year, which was 14.09% higher than that of the same quarter in the last fiscal year.
Western Union Expands Remittance App to Singapore
Western Union launched its mobile app in Singapore last week. This is the remittance giant’s third such activation in Asia this year, as Singapore now joins Hong Kong and Malaysia where Western Union offers service on the mobile app. According to the firm, customers can pay for their transactions within the app using a choice of card or account, on top of having the option to pay in-person at any of Western Union’s agent locations. Singapore, the 4th largest remitter in Asia after Hong Kong, Japan and Malaysia, is a primary center for money movement, accounting for around US$6.1 bn of remittances last year.
Western Union Says It Is “Ready to Adopt Any Kind of Currency”
Western Union has been sending out feelers that it has been steadily watching the crypto space and global crypto adoption, and it seems to be ready to add digital assets as a payment option for its customers. The remittance giant is very much ready to include virtual currencies as an addition payment mode on its platform. A comment by the firm’s funds transfer president Odilon Almeida stated that including digital assets is not an uphill task considering it already deals with 130 global currencies. He explained that cryptocurrency needs to master three things: governance, compliance and volatility. He differentiates between cryptocurrency and blockchain saying that the former has a lot of potential.
TransferMate Acquires Swiss X-Border Payments Co
Cross-border B2B payments provider TransferMate announced last week that it acquired FX payments company Devisenwerk, a Swiss-based firm. Financial details were not disclosed. Sinead Fitzmaurice, co-founder and CFO of TransferMate, said: “Devisenwerk is an exciting and innovative young company, which gives us immediate market entry into Switzerland, allowing us to both pay out and collect in a very significant market for corporates. Very few payments companies have direct clearing access to Swiss banks and this acquisition provides that for us.”
Robinhood Retreats from Checking, Savings Products
A group of US senators have written to the regulators last week expressing concern that fintech startup Robinhood may not be offering full transparency to its customers over the botched launch of its new service. The senators have asked the heads of the heads of the SEC, SIPC and FDIC for an update on how regulators carefully monitor fintechs who, intentionally or not, blur financial products for a competitive advantage. Robinhood garnered a lot of attention previous week after announcing a checking and savings product with 3% interest (plus no fees, access to over 75,000 ATMs, and a personalised debit card), which many believed too good to be true. Just a day after making its announcement, Robinhood said it would re-brand and re-launch the product. Robinhood’s founders acknowledged that its plan may have caused some confusion.
Listen to our November Fintech Monthly Podcast here.
Weekly Round-up (10 December – 16 December 2018)
The week ended 16 December saw continued action in international money transfers and fintech universe. In a major revelation, an article in The Guardian outlined an array of delays and errors that the traditional global payments network of SWIFT is prone to. Meanwhile, PayPal launched its Xoom money transfer service in Canada and announced Usain Bolt as its global brand ambassador. Also, PayPal-backed South Korean fintech Viva Republica secured US$ 80 mn at a valuation of US$ 1.2 bn. There were reports of UAE Exchange and Ripple planning to launch blockchain-powered cross-border remittances. South Korea-based Coinone launched a remittance app Cross, based on Ripple’s xCurrent. Western Union announced a collaboration with TerraPay to allow mobile wallet and bank account and MoneyGram launched its new mobile application in 15 countries. Hong Kong-based Airwallex was granted an EMI license from the FCA and UK-based fintech startup Revolut received the European banking license from the Bank of Lithuania and TransferGo raised US$ 17.6 mn in Series B funding.
The Guardian Report Reveals SWIFT Cross-Border Payments to be Problematic
A new exposé from UK’s The Guardian newspaper tracked 4 stories of people and charities having to deal with the inconsistencies, errors, and delays of the SWIFT cross-border banking system. According to the report, the acronym SWIFT rel=”nofollow” has often “proved to be a misnomer.” According to the global head of strategic accounts at Ripple, Marcus Treacher, the Guardian article represents a stark reminder of the importance of crypto, blockchain, and digital assets like Ripple.
PayPal Launches Xoom in Canada; Announces Usain Bolt as Brand Ambassador
PayPal launched Xoom, its international money transfer service, in Canada, which is expected to help Canadians to send money, pay bills or reload phones to 130+ countries. Customers will be able to send up to $12,500 CAD in a single transaction to countries like China, India and the Philippines. Introducing Xoom will benefit one in five people living in Canada – many of whom support family members overseas for things like medical bills, education, utility bills, and other financial needs. Xoom also announced eight-time Olympic Gold Medalist Usain Bolt as its global brand ambassador through 2020.
PayPal-Backed Toss Gets US$ 80 mn Funding at US$ 1.2 bn Valuation
Seoul-based fintech startup Viva Republica, the PayPal-backed maker of financial services platform Toss, announced securing US$ 80 million in a funding. The investment has delivered unicorn status for the Fintech as the valuation was reported to be $1.2 billion. The latest round was led by Silicon Valley-based venture capital firms Kleiner Perkins and Ribbit Capital that are making their first investments in Korea with this deal. Existing investors, including Altos Ventures, Bessemer Venture Partners, Goodwater Capital, KTB Network, Novel, PayPal and Qualcomm Venture, also participated in this round.
Ripple, UAE Exchange to Launch Blockchain Payments by Q1 2019
UAE-based UAE Exchange and Ripple plan to launch blockchain-powered cross-border remittances to Asia by the first quarter of 2019. According to a report, with Asia among the biggest recipients of remittances sent around the world in 2017 and with a lot of it coming from workers in the Middle East, UAE Exchange and Ripple want a piece of that action.
Ripple Powers Coinone’s Remittance App in South Korea
Coinone Transfer has unleashed South Korea’s first Ripple’s blockchain-powered remittance mobile app and web service, Cross. Using RippleNet, the services offers payments to Thailand and the Philippines. Coinone Transfer uses RippleNet in collaboration with Cebuana Lhuillier (Philippines) and the Siam Commercial Bank (Thailand) to make sure the service was launched. Coinone’s partnership with SCB also will soon offer Cross customers a direct link to PromptPay, which enables recipients with a Thai bank account to receive payments directly and instantly.
Western Union Strikes Alliance with TerraPay
Global money transfer leader Western Union announced an alliance with TerraPay to enable mobile wallet and bank account payout. With this deal, Western Union’s account payout network can be used for sending cash to customers’ mobile wallets directly in Europe, Africa, Asia and Latin America. TerraPay’s low value payments network connects financial instruments internationally. On its part, the Western Union network connects to local banks, national payment settlement switches, third-party payment processors, mobile wallets, prepaid and other card connections.
MoneyGram Launches New Mobile App Across US, 14 Other Countries
Global money transfer major MoneyGram launched its new mobile application across 15 countries including US, UK, Australia and other European countries. The mobile app targets convenience and security with features such as biometric authentication, transfer tracking, location finder, fees estimates etc. MoneyGram Chairman and CEO, Alex Holmes said more than 70% of its online transactions are made on a mobile device. As a result, it’s critical that the consumers who use their smartphones to complete transactions have a product that provides an exceptional customer experience.
Airwallex granted EMI license by the FCA
Hong Kong-based fintech Airwallex has been granted an Electronic Money Institution (EMI) license from the UK Financial Conduct Authority (FCA). The EMI license is expected to boost the company’s growth by allowing operations throughout the EU by passporting through the region. Airwallex can now onboard clients across European countries, integrate with local banks to provide financial infrastructure, and provide payment services. Airwallex has also applied for the new virtual bank license in Hong Kong under a joint venture with the Bank of East Asia and Sequoia Capital.
Fintech startup Revolut Receives European Banking License
London-based fintech Revolut has obtained a European banking license, that will allow the company to offer services typically provided by traditional banks, including full current accounts, consumer and business lending and overdrafts. Customers will also be able to deposit their salaries directly into Revolut accounts, with up to €100,000 covered under the European Deposit Insurance Scheme. Thanks to the EU’s “bank passport” system, the licence allows Revolut to offer its services throughout the EU.
TransferGo Gets US$ 17.5 Mn in Funding
London-based international money transfer startup TransferGo has raised just over US$ 17.6 mn in Series B funding, including an earlier tranche of funding closed in May. The round was led by Vostok Emerging Finance and Silicon Valley’s Hard Yaka, with participation from Revo Capital, U-Start Club and Practica Capital. TransferGo launched a free international money transfer service in October. As reported in October, the paytech launched an equity crowdfunding campaign on Seedrs, aiming to raise a minimum of €1 mn on top of the €10.5 mn already committed. That has now closed.
Weekly Round-up (03 December – 09 December 2018)
The week of 3rd to 8th December 2018 saw continued action in the international payments and fintech space. The World Bank said that global remittances are projected to reach a new record in 2018 and India will retain its position as the world’s top recipient of remittances. A Juniper Research report revealed that annual online payment fraud losses to reach US$48 bn by 2023. A Western Union executive said that the top traditional money transfer firm is pursuing an enterprise-wide digital transformation. While American Express praised Ripple’s capability to process cross-border transactions in a matter of seconds, Ripple CEO said XRP may announce a big news before end of year. Meanwhile, TransferWise introduced its borderless account to Ireland.
Remittances to Low- and Middle-Income Countries Grow in 2018; India to Retains the Top Spot
In its latest edition of “Migration and Development Brief” released last week, the World Bank said that remittances to the low- and middle-income countries were projected to reach a new record in 2018. The Bank estimates that officially recorded remittances to developing countries will increase by 10.8% to reach US$ 528 bn. Global remittances, including flows to high-income countries, are projected to grow by 10.3% to US $689 bn. According to the report, India will retain its position as the world’s top recipient of remittances with its diaspora sending a whopping US$ 80 bn back home, followed by China (US$ 67 bn), Mexico and the Philippines (US$ 34 bn each) and Egypt (US$ 26 bn). India has registered a significant flow of remittances from USD 62.7 billion in 2016 to USD 65.3 billion in 2017.
Online Payment Fraud Losses to Reach US$48 bn by 2023: Juniper Research
The Juniper Research report revealed that annual online payment fraud losses from e-Commerce, airline ticketing, money transfer, and banking services, will reach US$ 48 bn by 2023; up from the US$ 22 bn in losses projected for 2018. Juniper claimed that a critical driver behind these losses will be the continued high level of data breaches resulting in the theft of sensitive personal information. A Juniper white paper, Future Fraud ~ 3 Dynamics Changing Fraud in 2019, noted that fraudulent activities are directly linked to e-commerce and other activities that involved online payment. Juniper says fraudsters are actually the first to exploit new systems for their own benefits.
Western Union’s Continued Digital Push
According to a report last week, Western Union is pursuing an enterprise-wide digital transformation. The move has been going on for over a decade and it does not have only millennials and digital natives in mind. Western Union says that it wants its technology to be inclusive since its biggest consumer are in their 50s and older. It is noted by Western Union that it places importance on its brick and mortar components as they make it easier for people to transfer money internationally. The company launched Western Union Digital in 2011. The money transfer firm offers bank to bank services, website, app, app to cash, ATM, and branch transactions.
American Express Praises Ripple’s Capability
American Express revealed the results of a pilot test of Ripple’s xCurrent solution for cross-border payments last week. At the Wings of Change Europe conference in Madrid, Amex general manager of corporate payments Carlos Carriedo said that Ripple’s technology has the potential to dramatically improve the sluggish status quo of international payments. “We did a pilot, partnering with Santander locally, and with Ripple to just do cross-border transactions. Cross-border transactions continue to be complex and slow. And in a matter of seconds, through this test, our clients were able to transfer funds in a very transparent and seamless way, from one part of the world to the other one,” said Carriedo.
xRapid to be Used by “Major Banks” by EoY: Ripple CEO
xRapid could be used by major banks by the end of the year, said Ripple’s CEO Brad Garlinghouse. Earlier this year, Mr. Garlinghouse talked about the future of Ripple and how different companies are starting to embrace the services and products the company is developing. Even as Garlinghouse stated that a “bank” would be using the product, there are currently no banks that publicly announced that they are using xRapid. However, there are 4 customers signed onto xRapid, with all of them being non-bank financial institutions focused on serving cross-border payments.
TransferWise Takes Borderless Account to Ireland
TransferWise is introducing its borderless account – and related debit card – to Ireland, building on its money transfer service there. For Irish consumers regularly travelling, living or working between two countries, the borderless account is expected to make managing their funds easier than before. With this, TransferWise customers in Ireland will be able to get a free account with local bank details for the UK, US, Australia and Europe as if they lived there, as well as a debit card for spending abroad. Customers can hold money in up to 45 currencies and convert between them at the real exchange.
Weekly Round-up (26 November – 02 December 2018)
Action continued in the international money transfers and fintech space during week of 26 November to 2 December 2018, with more new announcements and updates from some of the key players. WorldRemit announced partnership with BRAC Bank and bKash to boost its presence in Bangladesh. Revolut announced plans to launch in Asia-Pacific with Singapore as its regional headquarters. While Western Union expanded its online international money transfers in Malaysia, MoneyGram announced expansion into seven new geographies in Europe. Africa-focused SimbaPay and Kenya’s Family Bank announced a partnership to enable instant Money Transfer Service from Kenya to China. Meanwhile, there were reports of the World Bank’s Migration and Remittance Unit wanting to know more about the cross-border payment solutions of Ripple.
WorldRemit Partners with BRAC Bank and bKash for Bangladesh Business
UK-based digital money transfer company WorldRemit is expanding its presence in Bangladesh by partnering with BRAC Bank and bKash for digital money transfers. Using WorldRemit app or website, the Bangladeshi diaspora in over 50 countries can now send money to 1.5 mn BRAC Bank accounts, 186 BRAC Bank branches and 30 BRAC SME locations for cash collection and up to 30 mn bKash mobile money wallets. The move is inspired by the brand’s goal to reach 10 million customers around the world by 2020. In announcing the partnership, WorldRemit cited estimates by the central bank of Bangladesh that the country received around US$ 15 bn in remittances last year.
Revolut Secures Singapore and Japan Licenses
London-based fintech Revolut announced last week that it will be launching in Asia Pacific in the first quarter of 2019, and has already been granted the necessary licenses to operate in Singapore and Japan. Its Asia-Pacific headquarters will most likely be based in Singapore, with a number of key personnel responsible for business development, public relations and compliance already hired in the region. Revolut offers users a prepaid debit card and a current account, as well as premium features like cryptocurrency trading and free unlimited foreign exchange. Revolut also has plans to eventually release its app in the U.S., Canada, Australia and New Zealand.
Western Union Launches Online Money Transfers in Malaysia
The global money transfer leader Western Union has launched online money transfers in Malaysia via its Western Union mobile app and westernunion.com, enabling its customers in Malaysia to send money with online to almost anywhere in the world. Western Union is fast-tracking its digital footprint across the world and today has online services in more than 50 countries and territories. Western Union’s mobile app also enables customers who prefer paying for their transactions in person to commence their transaction on the app and then visit an agent location to complete their transaction more quickly. In making the announcement, Western Union cites a study by Microsoft and IDC Asia/Pacific that states that digital transformation will add around $10bn to the GDP of Malaysia by 2021.
MoneyGram Expands Digital Reach in Europe
Meanwhile, another money transfer biggie, MoneyGram announced digital reach to seven new countries, expanding its platform’s reach to 24 countries. The seven countries where the platform has currently been rolled out are Estonia, Finland, Latvia, Lithuania, Malta, Slovakia and Switzerland. Customers in these countries will now make remittances to MoneyGram locations in over 200 countries or to beneficiary’s bank accounts and mobile wallets. This expansion is in line with MoneyGram’s efforts to grow its digital money transfer service. The company has been seamlessly working on deepening its reach in the digital payments space, which is evident from the availability of MoneyGram.com from three to 24 markets in just 10 months.
Kenya’s Family Bank Partners SimbaPay for WeChat Transfers
Family Bank, a leading bank in Kenya, has partnered with UK-based money transfer financial technology firm SimbaPay to launch an instant money transfer service from Kenya to China through WeChat – a service that will help boost Kenya-China trade. The new product is aimed at Kenyan merchants who purchase goods from China, Kenya’s largest import source. According to the companies, more than seven million customers and businesses in Kenya will now have access to Africa-focused SimbaPay’s international money transfer service and will be able to send money to WeChat Pay from Family Bank’s PesaPap mobile banking application and USSD service. WeChat has more than 1 billion subscribers and is the largest payment and social media app in China.
World Bank Shows Interest in Ripple’s Remittance Service
The technology used by Ripple seems to be gaining more traction as more banks, and financial institutions are now using it. Ripple provides international payments services, making the transfer of funds from one country to another much easier, faster, and cost-effective. Of late, Ripple’s service has attracted the interest of the World Bank. KNOMAD, the Global Knowledge Partnership on Migration and Development, and World Bank’s Migration and Remittances Unit in Social Protection and Jobs Global Practice, are keen to know about Ripple’s the Distributed Ledger Technology (DLT), the innovation used by Ripple, which is helping banks solve remittance problems.
Weekly Round-up (19 November– 25 November 2018)
The week of 19th-25th November saw continued action in the global remittances and fintech space. InstaReM dominated the headlines with the successful first-close of its Series C round of funding. A report by UNESCO found the remittance charges to be still too high. Among other noteworthy updates in the remittance and fintech universe, Western Union announced expansion of payment services in Jamaica, there were reports of Nasdaq-listed Ebix Inc. being close to acquiring India’s largest foreign exchange company and of Hong Kong’s top digital wallet operator TNG Wallet planning an US IPO. There were mixed updates on Ripple. While TransferWise CEO said his company won’t use the Blockchain until more banks used Ripple, there were reports that Bank of America plans to embrace the Blockchain technology with Ripple as its partner.
InstaReM’s First-Close of US$ 20 mn+ Series C Funding Round
InstaReM, Southeast Asia’s leading digital money transfer fintech, announced a Series C round of over $20 million. The first close was led by new investors MDI Ventures, the venture capital arm of Indonesia’s Telkom, and Beacon Venture Capital, the venture capital arm of Thailand’s Kasikornbank and supported by existing investors Vertex Ventures, GSR Ventures, Rocket Internet and SBI-FMO Fund.