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.
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. With this round, the company’s total funding will cross $ 63 million, and is expected to close by January 2019. With fresh funding InstaReM aims to accelerate growth existing markets and enter new markets in Japan and Indonesia, where it is expected to receive licenses by the end of this year.
Migrants Losing US$ 25 bn A Year Through Remittance Fees: UN
Lowering the fees migrant workers pay to send money home could result in US$ 1 bn more being spent on education in developing countries, the United Nations said last week. Some remittance corridors in Africa carry fees of over 20%. A total of US $613 bn was sent in 2017 with the majority going to low and middle-income countries. However, costs remain high, at an average of about 7% of the total sum sent, according to UNESCO’s 2019 Global Education Report. World leaders have pledged to cut the cost of sending remittances to 3% under the sustainable development goals. If the target was met, it could save migrants more than US$ 25 bn each year, the report said.
Western Union Expands Payment Services in Jamaica
The Western Union Company announced an extended collaboration with Jamaica’s Grace Kennedy Currency Trading Services, to introduce the WU GlobalPay for FI platform. This global platform enables businesses in Jamaica to make fast, efficient and affordable payments around the world with a trusted international partner. By adopting the WU GlobalPay for FI platform, GraceKennedy Money Services becomes the first financial institution in Jamaica with access to 130 currencies.
Ebix to Acquire Indian Remittance Company Weizmann Forex
Nasdaq-listed Ebix is reportedly close to finalising a deal to acquire Weizmann Forex, a foreign exchange and domestic remittance player based in Mumbai, India. Ebix has over 50 offices across Australia, Brazil, Canada, India, New Zealand, Singapore, the US and the UK, and processes over US$ 100 bn worth of transactions annually across its platforms. Weizmann operates in the foreign exchange and remittance space and is a part of the Weizmann Group, which has interests in the energy, textile manufacturing and exports, as well as in foreign exchange transactions and inward money transfer services.
Hong Kong’s TNG Wallet Plans US IPO
TNG FinTech Group Inc., a Hong Kong-based digital wallet operator, is reportedly planning to seek as much as US$ 300 mn in a U.S. initial public offering. TNG, whose investors include billionaire Henry Cheng’s NWS Holdings, is working with advisers on preparations for the proposed share sale, according to the reports. Poor performance by newly-listed stocks is undermining Hong Kong’s ambition to rival the US as a hub for technology flotations, and Chinese technology companies are once again favouring US listings, according to JPMorgan, the largest bank in the US in terms of assets.
TransferWise Not to Consider Blockchain Until More Banks Use Ripple
Despite the popularity of blockchain, money transfer fintech TransferWise is not convinced that it is advantageous for companies that transfer money internationally. TransferWise CEO Taavet Hinrikus stated that while there exists a lot of excitement over the possibilities created by the blockchain, its operational realities present a new set of challenges on their own. Part of the problem is that blockchain technology has not yet achieved enough adoption among banks to make it more efficient than the prevailing payments systems. TransferWise has examined Ripple’s high-speed, cross-border payment solution, RippleNet, and has found no compelling reason to use it given its current level of adoption.
Speculations of Bank of America Considering Ripple
There were speculations about a possible collaboration between Ripple and Bank of America, the second largest bank in the US. However, no official announcement has been made so far, but it seems that Bank of America is getting ready to embrace blockchain technology. Previous week, Ripple CEO Brad Garlinghouse told that his company is able to gain customers at a fast rate relative to the market because financial firms are looking for faster, more modern technology than what is currently offered through SWIFT. Bank of America is reportedly trying to deploy a new app similar to Ripple’s that would allow customers to transfer their money across banks without having to go through the process of ‘re-authentication’ every time a transfer is made between the financial institutions.
Weekly Round-up (05 November – 11 November 2018)
Action continued in the remittance and fintech universe during the week of 5-11 October as stakeholders looked forward to the Singapore Fintech Festival. Among the key developments of the week, SWIFT denied the rumours of partnership with Ripple, Australia’s opposition leader promised a crackdown on high remittance fees in Australia, the US Federal Trade Commission ordered MoneyGram to pay US$ 125 mn in settlement of fraud allegations, MIT-backed SendFriend said it will integrate Ripple’s Xrapid for cross-border remittances, Singapore’s Wallex launched in Indonesia, Sweden’s leading bank SEB announced building Ripple-flavoured blockchain payments network and Western Union partnered with Kenya’s Safaricom to facilitate global money transfers. Workers’ remittances, meanwhile, continued to pour into the Emerging Markets on the back of sustained strength in the US dollar.
Singapore Fintech Festival Kicks off
The third edition of the three-day Singapore Fintech Festival (12-14 November) kicked off on Monday. This year’s event promises to be the biggest fintech event in the world to date with over 250 speakers, 450 exhibitors, 16 international pavilions and close to 40,000 participants. The Conference focuses on nine key themes across 70 sessions, including AI in finance; ASEAN fintech opportunities; cyber-security, techrisk and regtech; financial inclusion; future of banking; future of money; global investor summit; insurtech and market infrastructure.
SWIFT Debunks Ripple Integration Rumor
SWIFT threw cold water on a rumor about a possible integration with Ripple. A spokesperson for SWIFT told Finance Magnet, “I’m not sure where those rumours are coming from but the upcoming standards release … is entirely unrelated to RippleNet.” Ripple and Swift are direct competitors in the same market, but the difference in capital and influence in the world of finance is too asymmetric to think of the feasibility of an early partnership on an equal footing.
Australia’s Opposition Leader Promises Remittance Fee Crackdown
The cost of remittances is a major headache for expatriates in Australia. However, reports suggest that sending money overseas could be more affordable under a Bill Shorten government. Shorten said that his government would end “bamboozling pricing” by requiring all remittance providers, including the major banks, to disclose the true cost of transferring money overseas.
MoneyGram to Pay US$ 125 mn Fine in Fraud Case
The US Federal Trade Commission (FTC) said last week that MoneyGram has agreed to pay US$ 125 mn to settle allegations that the company failed to take steps to crack down on fraudulent money transfers. FTC said that MoneyGram breached a 2009 order that required the company to probe, suspend, and terminate high-fraud agents. The company said it would take steps to crack down on scammers who got victims to wire them money in schemes that often targeted the elderly and ranged from bogus cash prizes, to impersonating government officials from the IRS to posing as troubled relatives needing money.
MIT-backed SendFriend to Leverage Ripple’s Xrapid for Cross-Border Remittances
A consumer-facing international money transfer platform, SendFriend, which is backed by MIT Media Lab, Barclays, Mahindra Finance, Techstars, the MasterCard Foundation and Ripple is to integrate the latter’s XRP-powered xRapid to cut costs and boost the speed and efficiency of cross border money transfer services. With this, anyone can send money from anywhere, allowing the receiver get their funds wherever they are, without the need for banks or other big financial institutions. As a result, SendFriend has drastically reduced the fees charged by traditional money transfer institutions by 65%.
Singapore’s Wallex gets Remittance License from MAS, Launches in Indonesia
Singapore-based Wallex Technologies has launched in Indonesia, having obtained a Money Transfer License from Bank Indonesia and a Remittance License from the Monetary Authority of Singapore. Wallex Indonesia will prioritise on meeting the needs of the country’s SME customers. Citing data from Ministry of Co-operatives and SMEs, Wallex stated that these customers account for 97% of domestic employment and 56% of total business investment.
SEB to Build Ripple-Flavoured Blockchain Payments Network
Sweden’s SEB is to use Ripple’s blockchain technology to enable customers to make real-time intra-bank transfers between Stockholm and New York. The bank said that it has verified that Ripple’s technology is compatible with the bank’s infrastructure and work is now underway to build an operational system. Paula da Silva, the Head of Transaction Services at SEB, mentioned that all the customers of the bank are utilizing the technology for transfers. The intention is to use Ripple’s products and services for settlement between Sweden and the US that reduce costs and transaction times in cross-border payments.
Western Union Partners with Safaricom
Western Union and M-PESA announced a global P2P partnership last week that will make it easier for M-PESA customers to send money outside of Kenya and for this highly popular mobile payments platform to scale globally. M-Pesa customers can now leverage Western Union’s global-money movement platform to make cross-border payments in over 200 countries and territories, circumventing traditional infrastructure. The remittance service will support transactions in 130 currencies, with the daily money transfer amount capped at KES140,000.
Remittances Continue to Pour into Emerging Markets
Thanks to the sustained strength in the US dollar, remittances continued to pour into the Emerging Markets. The Bangladesh Bank data announced last week revealed that expatriate Bangladeshis sent US$ 5,108 mn remittances during the first four months of the current fiscal 2018-19, which is 12.17% higher than the same period of the preceding year. And overseas Pakistani workers remitted US$ 7,419.98 mn in the first four months (July to October) of FY19, as compared to US$ 6,444.46 mn received during the same period last year, according to the State Bank of Pakistan. During October 2018, the inflow of worker’s remittances amounted to US $2.0 bn, which is 37.7% higher than September 2018.
Also, Mexico’s central bank Banco de México reported that Mexico received US$2,709 mn in remittances in September, an increase of 8.8% compared with the same month of last year.
Weekly Round-up (29 October – 04 November 2018)
The week ended 4 November witnessed continued action in the remittances and fintech universe. Sustained strength in the US dollar continued to push migrants’ remittances into emerging markets. Among other noteworthy developments, Warren Buffet’s Berkshire Hathaway announced US$ 600 million investment in two fintech firms; Western Union announced a partnership with Amazon to white label its cross-border money transfer platform; Ripple announced plans to enter in the Middle East; TransferGo launched an equity crowdfunding campaign on leading European platform; and the digital banking startup, Monzo acquired the unicorn status with a fresh round of fundraising.
Remittances to Emerging Markets on a Rise
The dollar index, which measures the greenback against six major currencies, hit a high of 97.02 last week, its strongest since June 2017. With US dollar at its 16-month high amid growing signs of the U.S. economy outperforming its peers, there has been a spurt in the remittances to the emerging markets.
In India, the Non-resident Indian deposits jumped to US$ 5.7 bn in the first five months of this fiscal compared to US$ 0.5 bn in the same period last year. The rise is attributed to the sliding rupee, which makes deposits in the currency attractive for NRIs, and to higher oil prices, which have prompted inflows from NRIs in the Middle-east to increase.
In Bangladesh, remittance inflows in the first four months of the current fiscal year rose by 11.9% year-on-year, topping US$ 5 bn, due to the rise in value of the dollar against the Bangladeshi taka. Expatriate Bangladeshis sent home US$ 5.1 bn in July-October 2018 against US$ 4.55 bn sent during the same period of last FY 2017-18, according to Bangladesh Bank data released last week.
Remittances to Pakistan are expected to hit a record US$22 bn in FY2018-19. Analysts are predicting a double-digit growth in remittances, compared to US$ 19.62 bn received in 2017-18 to US$ 22.19 bn, if trends continue towards the end of the fiscal year. Pakistan has recorded a 13.14% increase in remittances in the 1Q 2018-19 compared to the same period last year, as per State Bank of Pakistan.
In Nepal, inflow of workers’ remittance in the first two months of the current fiscal year has increased by 33.4% to NPR 154.2 bn, as per Nepal Rastra Bank despite a fall in number of outbound Nepali workers. In terms of US dollar, workers’ remittance has increased by 22.3% in the review period compared to 5.2% in the corresponding period of the previous year, according to the Nepalese central bank.
Remittances to Mexico jumped to US$ 2.709 bn in September, accounting for an increase of 8.8% over the same month last year. The accumulated amount between January and September was US$ 24.676 bn, 10.8% more than in the same period in 2017, according to the Bank of Mexico, which added that the remittances sent by Mexicans who live abroad, have increased for 30 consecutive months.
Warren Buffett Invests US$ 600 mn in Fintech
Legendary investor-billionaire warren Buffet’s company, Berkshire Hathaway, which is known to make investments in tried-and-tested companies like Coca-Cola and American Express, as well as its purchases of established businesses, recently decided to try something new and add two fintech investments to its portfolio. The WSJ reported last week that Berkshire has invested about $600 mn in two major fintech companies, both of which are based in emerging markets. In August, Berkshire invested US$300 mn in Indian mobile-payment company Paytm, and recently, it has invested about US $300 mn in StoneCo, a Brazil-based payment processing company that recently went public.
Western Union and Amazon to Launch New Way to Pay
The Western Union Company announced last week that it is has been engaged by Amazon to launch a new payment option that allows international shoppers to pay in person, in local currency where available, for their online purchases. Amazon is focused on providing international customers with access to millions of products. Customers in select countries will be able to shop on Amazon and pay in person, in local currency, through the Western Union agent network. The new payment option seeks to address the needs of customers overseas, specifically for online shoppers who do not like paying virtually.
Ripple to Extend Coverage to the Middle East
To enhance its growth, the payments solution provider Ripple has decided to expand its coverage by taking its services to the Middle East with a new office slated to open in Dubai by the end of 2018. This was revealed by Dilip Rao, Ripple’s Global Head of Infrastructure Innovation while speaking at a conference in Dubai. Rao said that Ripple plans to fully enter the Asian market by setting up a base in Dubai. Rao confirmed that Ripple has signed up close to 200 institutions around the world with many of them from the Middle East. Rao also revealed that Ripple’s clients in the Middle East included the largest Islamic bank in Saudi Arabia known as Al-Rajhi, and Kuwait Finance House.
TransferGo Launches Crowdfunding Campaign
TransferGo announced the launch of an equity crowdfunding campaign on leading European platform, Seedrs, last week. With €10.5 mn committed from investors and over 5000 people pre-registered to invest, the UK-based firm is expecting to raise a total of €11.5 mn through the campaign to fuel further international expansion and product development. Co-founder and CEO Daumantas Dvilinskas says the crowdfunding campaign is “a way to bring customers even closer to our mission as we boost international expansion and develop new products”.
Monzo Acquires Unicorn Status with £85 mn Funding Round
Digital banking startup Monzo announced the close of a fresh fundraising round last week at £85mn, led by new US investors General Catalyst and Accel as the fintech firm prepares to expand. Monzo is the latest start-up to reach the unicorn status (a private company valued at $1 bn or more), following in the footsteps of fintech Revolut and cyber security start-up Darktrace. Monzo will raise more funds later this year in a crowdfunding round that will allow fans and customers to own a slice of the bank too.
Weekly Round-up (22 October – 28 October 2018)
Fintech universe was abuzz last week as stakeholders looked for clues from two big conferences – Money 20/20 & SIBOS 2018 – in two different parts of the world. Bloomberg reported that the sharp fall of the Indian rupee may boost inward remittances to India. Among the notable company updates, WorldRemit appointed Breon Corcoran as its new CEO, Azimo announced expansion of its European operations by opening a new office in Amsterdam, Earthport announced changes in its management, WorldFirst launched a Multi-currency business account in the US, Ripple released its Q3 report which indicated strong growth in XRP sales and EMQ teamed up with FOMO Pay to facilitate settlements from Singapore to China.
Money 20/20 in Las Vegas & SIBOS 2018 in Sydney
Fintech stakeholders across the globe attended – or followed – the Money 20/20 in Las Vegas and SIBOS 2018 in Sydney last week. Unsurprisingly, “Fintech” was the buzzword at both the events. The Swift International Banking Operations Seminar (Sibos) – held during October 22–25 in Sydney – was attended by over 7,000 bankers from across the globe. The four-day annual event mixed the big tech, traditional finance and fintech that are transforming the banking industry. Organized by the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Sibos focused on collaborative innovation among industry leaders from fintech, banking, internet and computer companies. Apart from banks, tech giants Google, IBM and Microsoft were also in attendance.
Meanwhile, the fintech boom was evident at the Money 20/20 2018 event that saw 11,500 industry professionals gathering in Las Vegas for the biggest U.S. conference. The event featured representatives of 3,500 companies, including some of the too-big-to-fail powerhouses as well as 400 startups like InstaReM, more than 450 speakers, hackathons, exhibits and much more. The future of cryptocurrencies and blockchain technology in the banking sphere remained the hot topics at the show. Although blockchain technology is still in its early stages and while rapid developments have taken place, recent studies suggest that the blockchain value-add to business will be over $3 trillion by 2030.
InstaReM showcased its innovative solutions for cross-border money transfers for individuals and institutions at the Sibos 2018 as well as Money 20/20.
Fall in Rupee to Boost Inward Remittances to India
Following the sharp fall in the Indian rupee against the US dollar, overseas Indians may boost remittances to a record high, helping bolster the nation’s efforts to support its currency. Bloomberg reported last week that India is expected to receive remittances of about US$ 76 bn in 2018, 10% more than the previous year. With an estimated 20 million Indians living overseas, the country receives billions of dollars in remittances each year. The record inward remittances should help bolster India’s efforts to cap its current-account deficit. The INR is currently trading at 73.2 to the US dollar, 2% off it’s all-time low of 74.4 touched on 10 October. The Indian currency has depreciated by 14% this year so far.
WorldRemit Appoints Breon Corcoran as New CEO
UK-based digital money transfer company, WorldRemit, appointed Breon Corcoran, the former CEO of Paddy Power Betfair, as its new chief executive last week. Corcoran is set to join the fintech as it pushes towards the unicorn status after successfully managing the merger of betting companies Betfair and Paddy Power in 2016. Ismail Ahmed, the founder and current chief executive of WorldRemit, becomes executive chairman. A former JPMorgan banker, Mr Corcoran’s role at WorldRemit will be to continue its global expansion at a time of growing competition in the international money remittance market.
Azimo Expands into Europe with New Office in Amsterdam
The UK-based Azimo announced last week that it was expanding its money transfer services further into Europe with the opening of a new office in Amsterdam. Azimo reported that the location will help it grow its share of the global cross-border payments market. The company has opened a new office in Amsterdam, as a base to help it grow its share of the global cross-border payments market. From Europe, cross-border payments market is over EUR 1 trillion. Three UK payments fintechs have chosen the Netherlands as their European base, City A.M. has learned, seeking to reinforce their offering for European customers amid regulatory uncertainty.
Hickman and Uberoi step aside from Earthport
Earthport plc, the leading payment network for cross-border payments, announced last week that Phil Hickman, Chairman, will retire from the Company with immediate effect. At the same time, Sunil Sabharwal, formerly non-executive Director, is appointed Interim Chairman. Earthport also announced former Chief Executive Officer Hank Uberoi will retire from the board as non-executive director. Uberoi resigned as boss of the firm in December 2017, ultimately being replaced by Amanda Mesler in July.
WorldFirst Launches Multi-currency Business Account in the U.S.
WorldFirst announced the launch of its multi-currency payments platform, World Account, for US-based businesses and online sellers, at Money20/20 USA event in Las Vegas last week. The World Account allows businesses to open and manage accounts in 7 different currencies (USD, GBP, EUR, CAD, JPY, AUD, and NZD) under one location, which streamlines expansion into new markets around the world and bypassing the complexities and bureaucracy traditionally associated with international business banking.
Ripple Unveils Q3 2018 XRP Markets Report
Ripple’s Q3 XRP Markets report indicated positive results for the cross-border payments project, which acts as validation of the coverage it has been receiving in the past 2 months. The report reveals a lot of interesting details about the project’s activity in the 3rd quarter. Ripple sold $163 million worth of XRP tokens, or 0.43% of the global volume, of which roughly $98 million was sold as a part of direct institutional sales by Ripple subsidiary, XRP II, LLC. Q3 also saw 3 billion XRP tokens released out of an escrow account, 2.6 billion of which was placed in a new account. The remaining 400 million will be used to support the XRP ecosystem.
EMQ, FOMO Pay to Support Remittances from Singapore to China
Financial settlement network EMQ has teamed up with QR code payment solution provider FOMO Pay to facilitate settlements from Singapore to China. Under the alliance, Chinese communities in Singapore will be able to directly send money to China in real-time. The partnership is supporting the growing demand for real-time international settlements from Singapore to China, with the ability to expand across other countries in Asia. According to an EMQ statement, the partnership will also facilitate and support the government’s 2020 Smart Nation Initiative to accelerate Singapore’s shift to a digital economy. It will also create more inclusive economy with greater access to digital financial services.
Weekly Round-up (15 October – 21 October 2018)
Two important events in the global financial services business in two different parts of the world will dominate the headlines in financial media this week. Meanwhile, the last week saw growing speculations about a possible partnership between two rival global payments platforms – SWIFT and Ripple, the entry of UK’s Moneynetint and Malaysia’s MoneyMatch on the RippleNet, Azimo’s entry into business payments space, Western Union’s partnership with Sampath Bank to provide money transfer services in Sri Lanka and an announcement by TransferWise to link up with payments infra in Singapore and HK.
Money 20/20 in Las Vegas and SIBOS 2018 in Sydney
The financial technology industry stakeholders are looking forward to two important events this week: Money 20/20 in Las Vegas and SIBOS 2018 in Sydney.
The Money20/20 event in Las Vegas (21-24 October) takes on the mission of creating a simpler, fairer, faster and more inclusive financial system for individuals, businesses, and society as a whole. Each year, we strive to improve and better serve our attendees who help make us the world’s most important payments, commerce and financial services event. Among other things, the participants of Money 2020 will discuss important topics such as Banking & Crypto, Fintech for Social Good, Payments & Platforms, Regulation & RegTech and the Fintech Revolution.
And on the other side of the world, Sibos 2018 is taking place at the International Convention Centre (ICC) Sydney during 22-25 October 2018 with more than 7,000 delegates, 200 exhibitors and hundreds of conference speakers and sessions. In this 2018 edition of SIBOS conference, the participants will be discussing an important theme – “Enabling the Digital Economy”, and a main point of conversation will be Ripple. This is important for the cryptocurrency and blockchain industries, helping to take steps towards making these markets more of a mainstream option for both banks and institutions of that nature.
InstaReM is showcasing its innovative solutions for cross-border money transfers at the Sibos 2018. Visit booth #DZ34 to find more.
Ripple-SWIFT Partnership Rumours
One rumor that has gained momentum of late is that of Ripple considering partnering with SWIFT. While this rumor is yet to be confirmed, participants expect if the rumor is true than an announcement will be made at SWIFT’s SIBOS conference in Australia later this month. Speculation intensified that a partnership is in the pipeline after Ripple announced its participation in the Sibos event underway in Sydney. These rumours gathered momentum with recent news that Santander was partnering with SWIFT for a new Global Payments Initiatives program. The fallout from this partnership could potentially be one of the biggest things to happen to Ripple, as it partners with those it is aiming to replace. Moreover, they will also have access to the 11,000 clients that SWIFT boasts of if news of the partnership is true.
Malaysia’s MoneyMatch Completes Its First Cross-border Transfer on RippleNet
In a major update, MoneyMatch, a Malaysian fintech start-up announced that it has successfully conducted its first blockchain-based cross-border transaction through the Ripple blockchain. The transaction was sent over a Ripple’s xVia, a standard API solution to power payments to and from emerging markets through Ripple’s decentralized global payment network, RippleNet. According to the Kuala Lumpur-based money transfer fintech, the transaction, which enabled a retail user to convert Malaysian ringgits (MYR) to Euros (EUR) at a ‘significantly lower cost’ compared to traditional transfer services was completed in a matter of hours. MoneyMatch is also working with multiple other RippleNet partners in other jurisdictions such as India, Thailand, USA and more.
Moneynetint Joins RippleNet
Moneynetint, a UK-based electronic e-money institution, which provides cross-border money transfers and currency exchange for corporate clients around the globe, announced last week that it has completed the integration phase with Ripple. Moneynetint has already received payment instructions from two other network partners. These partnership agreements will allow the firm to process payments in a decentralized manner. The cooperation signed with Ripple is part of MoneynetInt’s strategic move to advance into innovative areas of the payments industry.
Azimo Steps into Business Payments Space
UK-based Azimo digital money transfer service is taking on high street banks with a new service for businesses. Azimo Business, which launched last week, allows SME owners across the UK and Europe to pay for goods, salaries and investments in 189 countries and territories. With pricing that will undercut most banks by at least 75%, the service is aimed at entrepreneurs who are tired of high fees and unreliable technology from high street providers. In another statement, Azimo Chief Product Officer Dan Martins said that business payments have lagged behind consumer payments in terms of mobility.
Western Union and Sampath to Provide Money Transfer Services in Sri Lanka
Money transfer giant Western Union inked a deal with Sampath Bank, a leading bank in Sri Lanka to provide better money transfer services nationwide without recipients having to wait for days to get their funds from abroad. Western Union customers can now send money to Sri Lanka from over 200 territories and countries. Sampath currently has 229 branches in the country and its partnership with Western Union is expected to give better access and convenience to its account holders who regularly receive money from relatives who live and work overseas. The bank also has super branches that are open seven days a week.
TransferWise to Link Up with Payments Infra in SG, HK
UK-based TransferWise plans to nearly double its Asia Pacific headcount and link up with new instant payments infrastructure in both Hong Kong and Singapore. Competition in digital payments in Hong Kong, Singapore and across Asia is becoming increasingly fierce, as traditional financial institutions and new technology firms from around the world vie for dominance both within markets and in cross border payments. The company is currently applying for a stored value facility (SVF) license in Hong Kong so it can connect to Hong Kong’s Faster Payments System, which began operations in September.
Weekly Round-up (8 October – 14 October 2018)
The week ended 14 October 2018 saw continued action in fintech and remittance space as well as in individual companies. The International Monetary Fund and the World Bank jointly released a paper to guide policymakers around the world in their handling of fintech – including those involved in cross-border money transfers. While the voices continued to rise against blatant currency exchange rip-offs by Australian banks, money transfer giant Western Union launched high value account-to-account transfers from the UK; Worldpay extended its real-time payouts to over 50 countries; and surprisingly, Ripple partner Santander became one of the first banks to adopt SWIFT’s Global Payments Initiative (GPI).
IMF, World Bank unveil Fintech Agenda
In a significant industry development, international development agencies International Monetary Fund (IMF) and the World Bank launched the Bali Fintech Agenda, a set of 12 policy elements aimed at helping member countries to harness the benefits and opportunities of rapid advances in financial technology that are transforming the provision of banking services. These elements include using fintech to promote financial inclusion, allowing new technology players to have level playing fields with existing companies and having countries work together to protect the global financial system. As part of the Bali Fintech Agenda, the World Bank will work on using fintech to deepen financial markets, enhance responsible access to financial services, and improve cross-border payments and remittance transfer systems.
Will ACCC Check The Great Australian Bank Rip-off?
Voices continued to rise against blatant currency exchange rip-offs by Australian banks. According to a Mozo research, Aussies are paying some of the highest money international money transfer costs in the world, thanks to the big four banks. Mozo research shows that the big four banks are charging 4.7% more to customers, on average, on overseas money transfers than online operators like InstaReM, XE, World First etc. Capital Economics estimates that in 2016 Australians likely paid at least a $1 bn more in high fees and poor rates on their currency exchanges than they would pay in a competitive marketplace. To address the matter, the government announced last week that the Australian Competition and Consumer Commission (ACCC) will launch an investigation into foreign currency services.
Western Union Expands Digital Services in UK
The global money transfers giant Western Union Company announced its foray into the multibillion-dollar bank account-to-account money transfer sector for consumers, by launching high-value digital transfers from the United Kingdom to around the world. Consumers in the United Kingdom can now send up to £50,000 via their smartphones from wu.com or the Western Union mobile app, funded from accounts directly into bank accounts in many countries around the world. The sector has been rife with competition in recent years, with significant players coming out of the UK to disrupt the industry with fintechs like TransferWise, InstaReM etc. disrupting in international payments.
In another update from the company, Western Union announced a collaboration with Hosei University that will give students of the Japanese Language Program the ability to pay their tuition and expenses with WU GlobalPay for Students, offering a simplified payment process, with the assurance that funds will arrive on time and in full, without hidden charges.
Worldpay extends real-time payouts to over 50 countries
US-based money transfer firm Worldpay has extended FastAccess, a platform that enables real-time payouts, to more than 50 countries across North America, Europe and Asia. The solution enables seamless card-based payouts to be made within a maximum of 30 minutes. Worldpay’s dynamic payout solutions combine the enhanced Worldpay Bankout solution, which now delivers 154 direct bank disbursement destinations (up from 65), and Worldpay FastAccess – enabled by Visa Direct.
Ripple partner Santander goes live with SWIFT’s GPI
There were been reports last week that Santander is one of the first banks to adopt SWIFT’s Global Payments Initiative (GPI). According to reports, the banking giant will be using SWIFT’s GPI technology for cross-border payments and go live in four countries including, Poland, the UK, Spain and Argentina. However, this presents a conflict, as Santander was also one of the first banks to utilize Ripple’s xCurrent technology on a large scale with its OnePay FX app. This has led many to believe that Santander is beginning to move away from Ripple’s solution to what they chose it over. However, it is a confusing move, as the bank had recently announced the expansion of its Ripple (XRP)-powered OnePay FX Platform to other European countries.
Weekly Round-up (1 October – 7 October 2018)
Action continued in the remittances space last week with Ripple and TransferGo dominating headlines with major announcements at Ripple’s Swell by Ripple Conference. InstaReM received the “Network Accelerator Award” at the first-ever Blockchain Innovator Awards at the Swell Conference. Among other notable updates, Aussie competition watchdog ACCC announced inquiry into foreign currency conversion services after it received complaints against Western Union, PayPal and banks. Further, Western Union continued with its digital expansion and PayPal launched payments app for merchants in India.
The Swell by Ripple Conference
Ripple held its second annual Swell by Ripple customer conference last week. Over two days, the world’s leading experts in policy, payments and technology converged in San Francisco for 14 dynamic sessions, featuring 32 speakers, on the future of payments. The event also provided an opportunity for Ripple’s customers to meet, share and establish new corridors on RippleNet. The former US president, Bill Clinton, who was the keynote speaker at the event, said the potential of blockchain technology was very high and this was because the technology was accessible across national and international borders without excluding individuals based on their income group.
InstaReM Receives Ripple’s Network Accelerator Award
At the Swell conference, InstaReM was awarded the “Network Accelerator Award” at Ripple’s first ever Blockchain Innovator awards. The award was announced at the Swell Conference with InstaReM triumphing due to the number of currencies for which its able to provide, making it a faster, more transparent payment experience. The award recognizes InstaReM as the company that has brought the most matches onto its RippleNet. InstaReM has been able to provide transfers in a number of currencies and a faster and more transparent payment experience, which helped it clinch the prestigious award.
ACCC to Probe Currency Transfer Rates
In a notable update from down under, the Australian Competition and Consumer Commission (ACCC) launched an inquiry involving money transfer services and the expensive fees they charge to customers. The investigation is adding more pressure on Australia’s international money transfer and banking industry. The banks, traditional money transfer firms Travelex and Western Union, and more recent market entrants such as OFX and TransferWise are expected to be consulted by the ACCC inquiry. What sounded the alarm is the cost of sending funds from Australia to other nations. The World Bank has reported that Australians sent around AU$8.8 billion overseas in 2016. Yet they also found that Australia is the third most expensive G20 country for consumers and small businesses to send money from.
Western Union Gets Aggressive on Digital
The Wall Street Journal reported last week that Western Union is aggressively expanding its digital services as the money-transfer giant tries to keep pace with competitors vying for international transfers. At stake in this digital race is a growing share of an industry that each year handles more than half a trillion dollars in remittances, in which money mostly flows from migrant workers to their home countries. Western Union estimates that westernunion.com money-transfer revenue—which includes use of the mobile app— last year topped $400 million, or about 11% of its revenue.
TransferGo Launches Fee-Free Money Transfers
At the Ripple’s Swell Conference, UK-based remittance firm TransferGo announced that it has launched TransferGoFree, a fee-free international money transfer service, which means that the customers will be able to transfer money to 47 countries at no cost. TransferGo said it will charge zero fees and make the money transfer at the mid-market (inter-bank) forex rate. It is using Ripple to offer its fee-free transfers.
PayPal Launches Payments App for Indian Merchants
The global digital payments major PayPal has launched its first merchant facing app in India named PayPal for Business. The app makes available to them computed sales insights, professional invoicing capabilities and scope to accept payments in multiple currencies from across the world. The app is specifically aimed at the large number of freelance merchants as well as small merchants going online for the first time, especially through mobiles.
Weekly Round-up (24 September – 30 September 2018)
The week ended 30 September saw continued action in the remittances and fintech space with Chinese tech giants Alibaba and Tencent dominating the headlines with reports of their remittance business plans. Ripple was in the news with its Japanese JV securing a license from Japanese regulator and the launch of RippleNet-based initiative by Thailand’s Siam Commerial Bank. Among other updates, Google and Goldman Sachs announced investment in money transfer startup Veem; Western Union is exploring sale of its business-payments arm; and Stripe has become one the world’s top 10 most valuable startups.
Alibaba and Tencent Chasing Remittances
Remittance business in Asia may see a further transformation with the entry of Chinese tech giants Alibaba and Tencent. In a research, Daito Nippon Brokerage noted last week that both companies have recently launched money-transfer services that allow Hong Kong-based workers from Indonesia and the Philippines to send money home at low cost. Observers see these moves as Chinese tech giants’ first steps in the global remittance business. According to Reuters, Alibaba’s financial affiliate Ant Financial called its Hong Kong remittance initiative a starting point and significant step in accelerating its pace to promote financial inclusion globally. On the other hand, Tencent’s WeChat Pay is more cautious about plans for its Remittance service, although the company is open to “all possibilities.” Alibaba and Tencent face competition in remittances, not to mention the long list of technology and financial services companies that aim to compete more broadly in payments.
SBI-Ripple’s MoneyTap App Receives Regulatory Approval
Ripple’s partner and Japanese Fintech giant SBI Holdings revealed that its subsidiary, SBI Ripple Asia, is registered as a substitute agent for electronic payments. This move will completely clear the way for SBI Ripple Asia’s smartphone app MoneyTap. The application creates an environment that allows quick and safe money transfer between individuals. In a related update, SBI Remit, the largest remittance provider in Japan, partnered with BitPesa, a digital forex and payment platform for frontier markets based in Kenya. The collaboration aims to make the payment between Africa and Japan seamless and easy by using the blockchain platform.
Siam Commercial Bank Launches Ripple’s (XRP) Multi-hop
To reduce the hitches emanating from cross-border payments through inefficient management of global liquidity, which is prominent to the ASEAN region, Thailand’s Siam Commercial Bank is launching a new feature, “multi-hop” that makes it easy for banks to settle frictionless payments on behalf of other financial institutions on RippleNet. The innovation completely eliminates the necessity for a direct one-to-one connection between financial institutions purposely to settle payment. With the deployment of multi-hop, SCB can receive and transfer payment without a bilateral link that exist between the payment originator and beneficiary institutions.
Cross-Border Payment Startup Veem Gets Investment Boost
Veem, a blockchain-based international money transfers startup, has closed its final round of funding that helped raise more than $25 mn, led by Goldman Sachs, Google Ventures, Silicon Valley Bank and Kleiner Perkins. Veem is a new player in online payment sector and this investment will help it to grow further. The expansion would involve leveraging blockchain technology for secure, fast and affordable international money transfer. The expansion may involve finding a better network infrastructure for each fund transfer.
Western Union Is Weighing Sale of Business-Payments Unit
Western Union is weighing a sale of its business-payments arm, which could fetch at least $500 mn, according to a Bloomberg report last week. The unit provides small- and medium-sized businesses with cross-border supplier payment services, enabling those companies to pay vendors in their local currencies to mitigate against foreign exchange risk and fees. According to reports, the business payment operations have become burdensome for WU following corporate tax changes that affect the finances of US businesses in their overseas operations. WU relies significantly on foreign cash to provide its cross-border business payment services.
Stripe Jumps into World’s top 10 Most Valuable Startups
The payments company Stripe announced last week that it had raised an additional $245 mn of investment, pushing its value to $20 bn. Stripe’s valuation has more than doubled from $9.2 bn in just two years. The investment round was led by Tiger Global Management, along with DST Global and Sequoia. Stripe’s products are designed to streamline online payments and billing. The San Francisco-based company plans to use the money it raised to expand its international reach, grow its payments and treasury network, and build out enterprise features as larger companies adopt its platform.
Weekly Round-up (17 September – 23 September 2018)
Ripple dominated headlines in the fintech universe last week with a dramatic turnaround in the price of its beaten-down cryptocurrency XRP following a slew of positive news from the company. Action was conspicuous in some of the key remittance corridors of Africa with traditional and digital money transfer services providers like WorldReMit, MoneyGram and Remitly announcing new partnerships in the remittance hotspot. Let’s take a quick look at where the action was in the international remittances and fintech universe last week…
Ripple News: XRP Bounces Back
On the back of a slew of positive news, Ripple’s XRP, one of the worst-performing cryptocurrencies this year, made a strong comeback last week. XRP’s market capitalization crossed the US$ 25 bn-mark, surpassing Ethereum as the world’s second most valuable cryptocurrency. XRP has been the one of the worst-performing cryptocurrencies this year, having fallen more than 90% off its high at one point this summer. The recovery in XRP is attributed to a couple of positive news from Ripple.
Sagar Sarbhai, head of regulatory relations for Asia-Pacific and the Middle East at Ripple, told CNBC last week that the firm was making significant headway with its xRapid product, aimed at helping banks speed up transactions by using XRP. Sarbhai told CNBC that he was confident that the company will launch the product live in production in the next one month or so. The surge in XRP was also aided by the announcement from Ripple that its network (RippleNet) was now live in over 40 countries across six continents as the new payment corridors opened up in North America, Asia, Africa, Europe and South America, which will create more connection points for RippleNet members around the world.
In another development, Ripple announced adding PNC Financial Services Group, a leading bank in the US, to its network of users, enabling the PNC customers to receive real-time cross-border payments. With more than 8 million customers and retail branches in 19 states, PNC has a diverse set of customers, including consumers, small businesses and large corporates. Ripple’s technology will have an immediate impact on each of those groups, enabling PNC’s commercial clients to receive payments from overseas banks in real time.
Updates from WorldRemit
UK-based digital money transfer fintech WorldRemit announced last week that integrating with WhatsApp – one of the most popular messaging services in the world. With this, customers in over 145 countries may now receive WhatsApp notifications about their money transfers in real time. WorldRemit claims to be the first Fintech company in the UK to integrate with the WhatsApp Business solution.
There were also report that WorldRemit is looking at expanding its services to the African business community, with the launch of service in East Africa, the fastest growing region on the continent. The company announced a deal with Nigeria’s Access Bank to further expand its reach within the country. The partnership will make it easier for senders to transfer funds straight to bank accounts under Access Bank, and WorldRemit customers will be able to do this from over 50 countries via their mobile phones.
Also, there were reports that WorldRemit founder Ismail Ahmed was planning to step down as CEO and take up role of executive chairman. The shift comes as WorldRemit considers an eventual IPO that the company is planning in the next couple of years.
MoneyGram, Zeepay to Collaborate
US-based traditional money transfer giant MoneyGram announced partnering with local fintech Zeepay last week to provide remittance services to mobile money users in Ghana. Individuals in Ghana can now receive money into their mobile money wallets, irrespective of their location in Ghana and beyond. The partnership is expected to increase remittances in Ghana by $1 billion each year.
Remitly’s Makes Waves in Asia and Africa
US-based money transfer firm Remitly is eyeing a larger piece of the Philippine remittance pie, and it is seeking to corner around 40% of the market by 2022 from around 16% currently. In a media interview on the sidelines of a press briefing, Gene Nigro, Remitly’s VP for Global Business Development, said that the Philippines remittance market is growing at about 8% a year, and the online market is growing at triple digits and the company hopes to capture a substantial part of that market in the next four years.
In another update, Remitly announced entering into a global co-operation agreement with African remittance major Moneytrans to extend its modern and convenient remittance experience to Africa. Through this partnership, Remitly and Moneytrans will make available 4,000 retail payout locations in 10 countries which will help Remitly better serve the fast-growing remittance corridors in the Middle-East, North and Sub-Saharan Africa, which were collectively worth US$ 91 billion in 2017.
Weekly Round-up (10 September – 16 September 2018)
Last week saw continued action in international Remittances and Fintech universe. In a major industry update, New York’s banking regulator sued the government to void its decision to award national bank charters to fintechs. Among the updates from industry players, Japanese financial giant SBI Holdings will soon launch a payments application for iOS and Android devices powered by Ripple’s distributed ledger technology. Ripple was in the news also for Saudi Arabia’s National Commercial Bank coming on RippleNet. And yes, there were talks of Ripple’s potential partnership with Apple. Australia’s OFX launched its Global Currency Account in the UK, and Transferwise announced its numbers. Elsewhere, Western Union expanded its digital money transfer service to Mexico, Remitly announced expansion into Europe and Ria Money Transfer signed an agreement with Boost Mobile for global money transfers.
New York Sues US To Stop Fintech Bank Charters
In an industry update from the US, New York state’s banking regulator sued the federal government last week to nullify its decision to award national bank charters to fintech companies. Maria Vullo, superintendent of New York’s Department of Financial Services, called the July 31 decision by the Office of the Comptroller of the Currency to let fintech companies obtain charters “lawless, ill-conceived, and destabilizing of financial markets.” She said New York could best regulate those markets, but the OCC decision left consumers “at great risk of exploitation” by weakening oversight of predatory lending, allowing the creation of more “too-big-to-fail” institutions. It’s the second time that the Conference of State Bank Supervisors (CSBS) has filed suit against the OCC.
Japan’s SBI To Roll Out Ripple DLT-Based Payments App
Japanese financial giant SBI Holdings will soon launch a payments application for iOS and Android devices, powered by Ripple’s distributed ledger technology. Last week, SBI Ripple Asia – a JV between SBI Holdings and Ripple – announced that MoneyTap, the Ripple-powered app to facilitate low-cost money transfers, will first go live for three consortium members, before a staggered roll-out to the rest of the 60-odd consortium members, covering almost 80% of banking assets in Japan.
Saudi Arabian Banking Giant, National Commercial Bank, Joins RippleNet
In another update, Ripple announced last week that the National Commercial Bank (NCB) of Saudi Arabia – also known as Al Ahli Bank – one of the largest banks of the Islamic World – has joined the RippleNet. NCB will connect to other financial institutions around the world through RippleNet. The bank will first connect to financial institutions in North America and Asia, starting in Singapore.
Will Apple & Ripple Partner Up?
Over the past few months, Ripple has been partnering up with a number of other large financial institutions and companies. However, the one partnership that has got the whole of the Ripple community excited about is the connection with Apple. Last week, Global Coin Report pointed to the fact that back in May, Apple integrated Ripple’s Interledger Protocol as part of Apple’s cross-platform payment systems, which was quite a boon for XRP’s value. More recently, Apple reportedly added XRP to one of its stock-tracking applications.
OFX Brings FX Account Services To The UK
Another Australian foreign currency exchange company OFX has launched its Global Currency Account in the UK. Available to importers and exporters, the Global Currency Account is designed to simplify cash flow management for online merchants trading on international marketplaces. With the Global Currency Account, ecommerce merchants in the UK can now manage marketplace payments in multiple currencies (pounds, euros, US dollars, Hong Kong dollars, Australian dollars and Canadian dollars) using the feature.
TransferWise Announces FY 2018 Performance Figures
In an annual update last week, TransferWise announced that it has been profitable. For the year ended March 2018, the London-based money transfer firm reported a post-tax net profit of £6.2 mn (US$8 mn), according to CNBC. Its annual revenue nearly doubled to £117 mn during the period. The company said that $3.9 bn worth of transactions were moved around each month by its 4 million users.
Western Union Expands In Mexico With Digital Money Transfer
Last week, Western Union launched its mobile app with omni-channel choice, which will allow customers in Mexico to transfer funds digitally across more than 200 countries and territories. It enables customers in Mexico to send up to $2,999.99 at a flat fixed rate of $5. Currently, customers residing in Mexico can transfer money 24/7 with the help of the Western Union mobile app (iOS and Android) through payment options of their choice such as card in-app or cash and payment at retail.
Remitly Partners With Stripe To Expand Into Europe
US-based mobile remittance company Remitly announced launch of operations in Europe last week. Remitly has formed a partnership with payment processing platform, Stripe, to help process transactions in various European currencies. The partnership also enables Remitly quickly expand its payment mechanisms on a global basis. Remitly is now available in Austria, Belgium, Denmark, Finland, Germany, Ireland, Italy, the Netherlands, Norway, Spain, Sweden, and the UK.
Euronet, Sprint Team Up To Offer Ria Remittances At Boost Mobile Dealers
Last week, Euronet subsidiary Ria Money Transfer announced its agreement with Boost Mobile, a unit of Sprint Corporation, to enable its dealers to provide domestic as well as international money transfer services. The agreement would allow Boost customers to avail bill payment services at more than 6,000 locations globally. Meanwhile, the similar customer base of both the companies will enable Boost Mobile to drive more store traffic. It would also help Boost Mobile cater to its customers with a wide range of products and services.
Weekly Round-up (3 September – 9 September 2018)
The week ending on 9 September, 2018, saw more collaborations, expansion plans and new initiatives than the last one – While TransferGo partnered with Ripple to facilitate blockchain-enabled remittances, WorldRemit launched an inter-African money transfer service and XOOM announced a partnership with TransNetwork, among others.
Meanwhile, IBM announced introduction of a cross-border payment solution called Blockchain World Wire, which will compete with Swift and Ripple. And after decades of informal usage, the word “Fintech” entered the Lexicon, thus becoming an official word! Hurray!
“Fintech” Enters The Dictionary
In another major update of the week, after decades of usage, the word “fintech” made its way into the Merriam-Webster dictionary. Merriam-Webster defines “fintech” as “products and companies that employ newly developed digital and online technologies in the banking and financial services industries”. Another use of fintech is before another noun, which is the “fintech sector.” Merriam Webster stated: “The evolution of our technology is expressed in these terms: we are no longer naming our devices and programs, we’re talking about what we do with them, and what they do for us.”
IBM Introduces Cross-Border Payments Solution
In an update that may have a far-reaching impact on the international money transfer business, tech giant IBM announced the introduction of Blockchain World Wire, a cross-border payment solution. IBM is of the view that its Blockchain World Wire has what it takes to become the new financial rail that can simultaneously clear and settle cross-border payments in near real time. This global financial network will work on the Stellar network and will not only compete with the Swift system, but could also become a tough competitor to Ripple’s xRapid.
PayPal Crosses 250 Million Active Accounts
PayPal President & Chief Executive Dan Schulman announced last week that the number of active accounts on its platform recently surpassed the 250-million mark. In a company blog post, Schulman said this marked an important milestone for the digital payments company. To illustrate the importance of the 250-million mark, Schulman pointed out that if PayPal was a country, it would be the fifth most populated, ahead of Brazil.
TransferGo Partners With Ripple For Fund Transfers
In a key company update, UK-based digital remittance solution provider TransferGo has started processing the blockchain-enabled real-time transfers through Ripple. With this partnership, TransferGo joins the list of the few entities that facilitate instant fund transfer powered by the blockchain technology provided by Ripple Labs.
WorldRemit Launches Inter-Africa Money Transfer Services
The UK-based WorldRemit launched a new digital service within Africa, making it easier to send and receive money across the continent. According to WorldRemit, the service will make it easier to send and receive money across the continent and will also reduce the cost of sending money across borders. With the launch, the company seeks to focus on Kenya, Uganda, Rwanda and Tanzania. The service could serve frequent travellers who work in different countries as well as the owners of small businesses that purchase goods abroad.
Xoom, OXXO Pair On Money Transfers
In another company update, Xoom, PayPal’s international money transfer service, announced a partnership with TransNetwork, which allows its US customers to send money to Mexico and pick up orders at any OXXO location in the country. Xoom is the first online-only remittance player to partner with Mexico’s largest chain of convenience stores. The deal will add more than 17,000 cash pick-up locations, as well as allow recipients to choose from more than 35,000 locations in the country.
Weekly Round-up (27 August – 2 September 2018)
The week ended 2 September 2018 saw continued action in the cross-border money transfer space with some significant developments announced by the industry players as well as some major developments in the industry. While Airwallex announced moving base from Australia to Hong Kong, PayPal’s Xoom announced a partnership with Ria Money Transfer, MoneyGram with the Philippine’ Gcash and Azimo with Africa’s Interswitch. Western Union further expanded its “Digital” platform to Southeast Asia, Latin America and the Middle East and LumoXchange launched its Money Transfer Services in the Philippines. In Fintech space, Singapore’s MAS and the Dubai Financial Services Authority strengthened their existing Fintech relationship with a new agreement.
Airwallex Moves Base from Melbourne to Hong Kong
In a significant development, Tencent-backed cross-border payments service provider Airwallex shifted its headquarters from Melbourne to Hong Kong as it plans to submit a virtual banking licence application there. The company will team up with a traditional bank and other local partners as part of the application process. Airwallex co-founder and CEO Jack Zhang told SCMP that the company considered HK to be an ideal location for its headquarters as it was an international financial centre where it could serve its global clients worldwide. Another reason for the relocation to HK is the proximity to its clients including Tencent, Ctrip, JD.com and Bank of East Asia.
Paypal’s Xoom Ties Up with Ria; Expands in Ukraine
In another company update, PayPal increased its foothold in Eastern Europe and Africa, and boosted its presence in the global remittance market through a new partnership agreement. Paypal’s Xoom service has signed a deal with Euronet subsidiary Ria Money to offer Xoom customers cash pick-up services at more than 150,000 of Ria’s international network locations. The partnership will increase Xoom’s presence in Africa and Eastern Europe. In another update, Xoom announced launching money transfer services from the US to Ukraine. With this, Xoom now allows money transfers from the US to 130 countries, including Ukraine.
MoneyGram Partners with GCash in Philippines; Expands Digital Platform Further
US-based MoneyGram announced that it has tied up with GCash to launch a new money transfer service to more than 10 million GCash mobile wallets in the Philippines. With this tie-up, funds can be sent via MoneyGram online or at any one of MoneyGram’s thousands of locations in 200 countries to reach a GCash mobile wallet in minutes. The funds will then be deposited into the mobile wallet in the Philippine Peso and receivers will get an SMS notification of every incoming money transfer. MoneyGram also announced launching its online platform in Ireland, Poland, Sweden, Norway and Denmark – after expanding the platform to Australia, Austria, Belgium, the Netherlands and Portugal the previous week.
Azimo Partners with African Payments Firm
UK-based digital money transfer service Azimo announced a partnership with African payments business Interswitch. The deal will expand money transfer services from Europe, where Azimo has a presence in 23 countries, to any customer in Nigeria. The announcement coincides with Azimo’s participation in British PM Theresa May’s outreach in Africa, as part of the UK government’s efforts to build fresh trade agreements with new markets after UK’s formal withdrawal from the EU.
Western Union Accelerates Global Digital Expansion
Western Union is further expanding its international money transfer service in Southeast Asia, Latin America and the Middle East. In Asia, WU digital services will include Malaysia and Singapore after Hong Kong, where WU’s digital money transfer service is already live. In Latin America, WU’s digital service is being expanded to Mexico after Brazil, Panama and Jamaica. And in the Middle East, The UAE will join Bahrain, Kuwait, Oman and Qatar, where WU currently provides access to digital international payments. The recent expansion is part of the firm’s wider mission of bringing speed and convenience to the global payments market.
LumoXchange Launches Money Transfer Services in the Philippines
In another company news, LumoXchange, a US-based fintech payments company, announced the launch of its money transfer service to the Philippines. The company has built a platform that allows users to compare exchange rate offers from the leading banks in the Philippines and send money. LumoXchange Founder and CEO Maf Sonko said that this service can help Filipinos get P1 to P2 more for every US dollar, which can mean savings of upto 30%. The Philippine banks compete to convert inbound remittances to Filipino Pesos by offering competitive exchange rates and options to pay beneficiaries directly into their bank account or cash pick-up.
Swift’s Cross-Border Initiative Gains Fintech Support
UK-based Ebury became the first financial technology company to launch Swift’s Global Payments Innovation service, joining a network of banks in supporting GPI, which is designed to facilitate faster payments. About half of GPI payments are credited within 30 minutes and many within seconds, which should give Ebury’s customers a faster international payments experience. Ebury clients should also be able to have greater transparency into fees and payments tracking through GPI. The move has been hailed as “an important milestone” by Swift which is looking to encourage new non-bank entrants to join the traditional banks already on the service.
MAS and DFSA Bolster Fintech Ties
In a notable development in the fintech space, the Monetary Authority of Singapore and the Dubai Financial Services Authority strengthened their existing Fintech relationship with a new agreement last week. According to MAS, their most recent collaboration will see mutual referrals of promising Fintech firms between the two jurisdictions. Both authorities have agreed to work on joint projects on the application of key technologies including digital & mobile payments, blockchain & distributed ledgers, Big Data and Application Programming Interfaces (APIs). The agreement is described as a commitment by both regulatory authorities to support financial innovation and competition, thus enhancing the ability of firms to manage risk better, reduce costs and boost efficiency.
Weekly Round-up (20 August – 26 August 2018)
The week ended 26 August 2018 witnessed the remittance industry doing its bit to support the victims of the devastating floods that severely stressed the Indian state of Kerala. A number of remittance service providers including InstaReM, Western Union and others announced donations and/or waiving off transfer fees, thus contributing to the cause. Among other developments of the week, while Ripple announced three new exchange partners, the cryptocurrency fintech heaved a sigh of relief after a plaintiff voluntarily took back the class-action lawsuit filed against the company. MoneyGram expanded its digital platform to include five more countries, and Remitly announced increasing its daily transfer limits to the crucial US-to-India corridor. Among the industry updates, reports expressed concerns that the UK citizens visiting the European Union could face extra credit card charges in the event of a very likely “no-deal Brexit”.
Money transfer firms extend help to victims of Kerala floods
Remittance can be a powerful tool in helping with the floods disaster. The state of Kerala is the largest receiver of remittances among all Indian states, accounting of nearly 19% of total remittances received by India. Remittance service providers responded with generous offerings – contributing directly as well as indirectly to the cause.
InstaReM announced waiving off of transfer fees on remittances of donations to the Prime Minister’s National Relief Fund (PMNRF) to enable the influential non-resident Indian (NRI) community to contribute to the relief efforts for the people affected by the floods. Western Union announced a co-ordinated response involving the company’s employees and its agent network to provide humanitarian relief. Between August 28 and September 27, Western Union will donate US $1 for each transaction sent to a Western Union Agent location in Kerala from participating Western Union agent locations across the globe and via WU.com and WU mobile app. Transfewise is giving all customers who donate to the Kerala Chief Minister’s Distress Relief Fund through TransferWise a free transfer up to 100 GBP (or the equivalent in another currency) on their next transfer. Gulf-based UAE Exchange also waived off service fee on remittances to Kerala Chief Minister’s Distress Relief Fund.
In an interview with CNBC’s Crypto Trader show, Ripple’s head of product Asheesh Birla said their clients prefer XRP over fiat currencies for cross-border transactions. Birla said the overall costs and volatility involved in XRP are far less than the fiat currencies. Birla said that Ripple is more inclined towards providing seamless solutions for cross-border payments. He said Ripple is passionate about easing cross-border remittance. According to Ripple, smaller financial institutions and startups are more likely to see significant savings by using xRapid for cross-border transactions.
In a development that comes as a big relief for Ripple, a US District Court said that the plaintiff Ryan Coffey has voluntarily taken back the class-action lawsuit he filed against Ripple its CEO earlier this year. In another update, (there is no official communication from Ripple), there were reports that Ripple plans on merging its three main products—xVia, xCurrent and xRapid—into one convenient solution called Convergence. Ripple also announced adding three new exchange partners – Bittrex, Bitso and Coins.Ph – to xRapid to facilitate xRapid payments to move from one currency into XRP and then convert into another swiftly.
Moneygram expands Digital platforms
Traditional remittances provider MoneyGram announced the expansion of its digital platform to five new countries – Australia, Austria, Belgium, the Netherlands and Portugal. With the expansion, customers in these countries can now send money 24/7 directly to more than two billion bank accounts and mobile wallets or to any MoneyGram location in more than 200 countries and territories.
Remittance players set eye on the US-India remittance corridor
UK-based digital remittance provider Remitly announced increasing its daily transfer limits to $30,000 in the crucial US-to-India corridor in response to the growing competitive pressure in the key US-outbound corridor. Earlier, Xoom increased its daily transfer limit to $25,000 to 50 countries including India. Additional pressure comes from the other digital cross-border specialists, including InstaReM, that have made significant inroads to the US market.
Money Mover partners with AIMA
The Alternative Investment Management Association (AIMA) and international money transfers brand UK-based fintech Money Mover signed a partnership deal that will help AIMA’s 1,900 corporate members save money on overseas payments as they can now send money abroad without the burden of hefty bank fees.
No-Brexit Deal means Higher Cost-Border Payment Costs
Among other updates on cross-border money transfer industry, the odds of Britain entering a no-deal Brexit are looking increasingly likely. Implications of a no-deal Brexit for British businesses were highlighted in a technical notice published by the UK government last week. The notice stated that the cost of card payments between the UK and EU will likely increase, and these cross-border payments will no longer be covered by the surcharging ban. This will prevent businesses in UK from charging consumers who use specific payment options. Aside from this, the cost of euro transactions is likely going to increase as well. Those living in Europe or working in the EEA could also lose access to UK banking and pension services with a ‘no-deal Brexit’.
Weekly Round-up (13 August – 20 August 2018)
Action continued in the global money transfers market last week with sustained surge of the US Dollar against most other currencies. Remittances to India continued to rise as the Indian Rupee breached the psychological barrier of 70 against the US dollar. Among other developments, Ripple continued to make news in the cross-border money transfer space with the company announcing its preferred cryptocurrency exchanges and its entry into Sri Lankan market. Among company announcements in the remittances space, Wyre announced the sale of the retail cross-border service to WorldFirst and London-based WorldRemit signed a deal with Bank of Africa and Kenya’s Safaricom.
Turkish Lira Crashes as the US Dollar Continues to Strengthen
The turmoil in the global currencies market continued as the US dollar gained further strength. After showing significant weakness in 2017, the greenback has strengthened against nearly every other major currency in the world, and those of the Emerging Markets in particular. The Turkish Lira fell further as the dollar’s rise stoked fears that Turkey may find it tough to manage its large debt, which is largely denominated in the US dollar. The Turkish Lira lost nearly one-fifth against the US dollar last week. The crisis in Turkey sent ripples across the globe, and we saw a further fall in the value of European and Asian currencies. The strength of the US dollar has resulted in the Chinese Yuan coming nearly 10% off its highs of the year, the Brazilian Real losing 18% in value year to date, the Russian Ruble weakening by nearly 20% YTD and the Indian Rupee losing nearly 10% YTD.
Remittances to India Surge as INR Breaches the 70-Mark Against USD
The Indian Rupee continued to weaken against the US dollar. As the Rupee breached the psychological 70-mark for the first time against the US dollar last week, it stoked a further surge in remittances to India, especially from the Gulf and Western countries. The remittances to India have been rising in the past few months due to the volatility in the Indian currency market. Remitters to India are taking the opportunity to send their money back to India to get more value for their money.
In a new announcement, Ripple named Bittrex, Bits and Coin.Ph – in the US, Mexico and the Philippines, respectively – as its “preferred’ cryptocurrency exchanges to solidify its xRapid ecosystem wherein XRP will be used to facilitate payment flows between banks globally. Ripple announced its entry in Sri Lanka with a partnership with the island country’s Cargills Bank to facilitate cross-border payments. Cargills will integrate with the xCurrent blockchain to allow users to make safer, faster international payments. Meanwhile, in an interview with CNBC, a Ripple executive said it is looking to expand services to mainland China with its distributed ledger technology designed to speed up cross-border payments.
Wyre Sells Retail Cross-Border Payments Service to WorldFirst
Wyre, a San Francisco, US-based digital currency company helping businesses to send money to individuals and business worldwide, announced last week that it entered into a definitive account transfer agreement for the sale of the majority of its retail money transfer business to London-based WorldFirst. The transaction has already completed and the migration process has started. The transaction is part of Wyre’s larger focus for their API-first approach and WorldFirst’s global infrastructure and payment coverage made them a clear choice.
WorldRemit Signs Deals with Bank of Africa / Safaricom
Among other announcement in the cross-border money transfer space, London-based WorldRemit signed a partnership agreement with the Bank of Africa, a pan-African bank with operations in 18 African countries. The partnership will enable WorldRemit customers send remittances to any of the bank’s outlets in Uganda and across Africa. Under the new arrangement, Bank of Africa will allow customers to send money instantly to 35 new cash pickup locations in Uganda – stretching from Gulu to Entebbe and from Mbale to Mbarara.
WorldRemit also announced signing a direct partnership with Kenya’s telcom giant Safaricom last week to enable instant cross-border money transfers to 28.6 million M-PESA mobile money accounts in Kenya. The direct partnership marks the culmination of years of rapidly growing volumes of international money transfers to M-PESA accounts by WorldRemit users, and supports the company’s plan to serve 10 million customers connected to emerging markets by 2020.
MySQUAR Launches Mobile Cross-border Remittance Service
The Myanmar-focused MySQUAR has soft-launched its cross-border remittance service, the first offering on its mobile money platform. The company and its partners conducted a series of successful remittance tests earlier this summer along the Singapore-to-Myanmar corridor. The company is targeting the Singapore-Myanmar corridor first as the former has a large population of students and workers from Myanmar who frequently send money home. A full launch of the remittance service is expected by the end of September while MySQUAR is also working on additional offerings for its mobile money platform.
Weekly Round-up (7 August – 13 August 2018)
Action continued in the international money transfers and Fintech universe. Among the players in cross-border money transfers, InstaReM, Ripple and CurrencyFair making headlines. Among the key industry developments, India’s banking regulator Reserve Bank of India (RBI) unveiled its ‘Inward Remittances Survey’ and there were mixed reactions to the national fintech charter announced by the Office of the Comptroller of the Currency (OCC) in the US last week.
Singapore Provides ‘Springboard’ To Asian Markets For FinTech: Prajit Nanu
In an exclusive interview with PYMNTS, Prajit Nanu, InstaReM’s co-founder and CEO, informs what makes Singapore a “Springboard” to Asian markets for Fintech. “Singapore has a FinTech-friendly regulatory framework and has been a good springboard for us to expand into other Asian markets,” InstaReM Co-founder & CEO Prajit Nanu told PYMNTS.com. “The Monetary Authority of Singapore (MAS) provides a responsive and forward-looking regulatory approach that enables promising FinTech innovations to develop and flourish.”
InstaReM Appoints New CTO
Among other updates, the news of Nilesh Pathak’s appointment as InstaReM’s Chief Technology Officer (CTO) was covered widely in the media including Finextra, Crowdfund Insider, Baypay Forum, Inc42, The Hans India and SiliconIndia. Nilesh joins InstaReM from J P Morgan Chase & Co., where he headed the 200+ strong Regulatory Technology Group for 4 years. Pathak’s induction is aimed at strengthening InstaReM’s existing technology capabilities, while developing new ones. With more than 20 years’ of experience behind him in building high-quality software, Nilesh will be using this wealth of experience to drive the firm’s technology strategy, architecture, development as well as infrastructure & development operations.
While the price of XRP, ripple’s altcoin, briefly crashed below ¢30, the company continued to find favorable coverage in the media. In an interview with TechCircle, Ripple India’s MD Navin Gupta said Ripple’s WhatsApp-like blockchain superhighway can replace SWIFT. In another interaction with AMBCrypto, Gupta said that, Ripple has begun targeting Asian markets for the propagation of their technology. More specifically, the settlements firm is focusing on the Japanese and Indian markets.
In a recent interview, TechCrunch founder Michael Arrington said Ripple’s XRP is one of the best cryptos when it comes to moving money from one part of the world to another. In the interview with Blockinpress, Arrington explained why his crypto hedge fund Arrington XRP Capital chose to denominate in this particular crypto. Meanwhile, Cryptoglobalist noted that Ripple has been making significant progress in tapping international markets despite its native token not reflecting the fundamental value. It is optimistic about its upcoming Swell Conference where former US president, Bill Clinton, will be a keynote speaker. At the Ripple Swell Conference, InstaReM CEO Prajit Nanu will speak on talk about InstaReM’s experience making payments live between Brazil and Europe – faster and cheaper than the competition.
Currencyfair to Acquire Convoy Payments
Verdict reported last week that Irish money transfer services provider CurrencyFair has agreed to acquire Convoy Payments, the Hong Kong-based payments arm of Convoy Global Holdings. The acquisition forms part of a €20m investment strategy and marks CurrencyFair’s entry in the Asian market.
Western Union Gains Traction with Digital Remittance Market
With growing penetration of internet-enabled devices, the trend is certainly towards “digital” in the cross-border money transfer universe. FXCompared reported that Western Unuion’s consumer-to-consumer revenues at its dotcom offering, westernunion.com, surged by a spectacular 22% during the recently-ended quarter. westernunion.com’s transaction count soared by 26% compared to the same time last year. Westernunion.com accounted for 11% of the company’s consumer-to-consumer sales during the last quarter. There are still vast numbers of people relying on these services to send money home or make other forms of payment.
India – RBI’s Inward Remittance Survey
The Indian states of Kerala, Maharashtra, Karnataka and Tamil Nadu together received close to 60% of the total remittances in the country in FY 2016-17, according to The Reserve Bank of India’s ‘Inward Remittances Survey’ announced last week. According to the World Bank, India is the biggest recipient of remittances worldwide. Of the total remittances into India in 2016-17, 74.2% was routed through private sector banks, while the share of public sector banks stood at 17.3%. Foreign banks accounted for 8.5% of the total remittance. The United Arab Emirates has emerged as the top source of inward remittances. UAE’s share in total remittances was 26.9%, followed by the United States (22.9%), Saudi Arabia (11.6%), Qatar (6.5%) and Kuwait (5.5%).
Mixed Reactions to OCC’s Fintech Charter
There were mixed reactions to the national fintech charter announced by the US Office of the Comptroller of the Currency (OCC) last week. While the fintech charter has been positioned by its supporters as a means of encouraging innovation and growth, but its opponents insist that it brings new risks and market distortions to the U.S. economy. According to American Banker, the OCC’s charter creates a new class of institutions that benefits large, established fintech firms and harms the very innovation and choice that U.S. Treasury Secretary Steven Mnuchin and the Comptroller of the Currency Joseph Otting say it would provide.
Maria T. Vullo, Superintendent of the New York Department of Financial Services (NYDFS), has expressed her opposition to the US Department of Treasury’s endorsement of regulatory “sandboxes” for FinTech firms. Vullo said that the idea that innovation will flourish only by allowing companies to evade laws that protect consumers, and which also safeguard markets and mitigate risk for the financial services industry, is preposterous. Meanwhile, as per a Finextra report, the Arizona Attorney General’s Office has opened the first fintech sandbox, enabling financial services startups to bypass red tape and begin testing their products with live consumer data.
Weekly Round-up (30 July – 6 August 2018)
Coming back to this week – the week ending 5th August 2018 saw continued action in the overseas money transfer business and fintech space. While the US federal government announced its support to fintech companies, while the UK regulator getting tough with banks and money transfer firms offering misleading currency exchange rates for overseas money transfers. A few more collaborations were announced in money transfer universe while there were reports that India’s largest bank may start offering cross-border payment solutions with Ripple.
Here are the other key developments in the overseas money transfer space:
Finally, the US finally takes action on fintech regulation
In a major development in the Fintech universe, the US Treasury Department announced significant changes in the fintech regulation and extended its approval for a new fintech charter and the introduction of sandboxes and opening access to consumer data. The Treasury said that it would begin accepting applications from non-depository fintech companies interested in a national bank charter.
The news comes after years of intense debate and lawsuits from state regulators who oppose the charter. Operating under a single federal license — and dealing with a single regulator — would allow fintech companies to run more efficiently. Consumers could also end up with better products and more options when they’re looking for loans from online providers.
This could well be beginning of a new chapter in the history of fintech in the US. Innovation is a cornerstone of the U.S. economy, and creating a regulatory environment that supports responsible innovation is crucial for economic growth and success, particularly in the financial sector.
FCA Reins in Misleading Currency Exchange Rates
In another development related to the regulation, Britain’s Financial Conduct Authority (FCA) has proposed new rules to stop banks and other firms from offering misleading currency exchange rates to people sending money abroad electronically. Under the new rules, if service providers present comparisons with rival services, they must be fair and balanced and capable of being substantiated.
Bill Clinton to address the Ripple Swell Conference
Ripple announced the Swell Conference (1-2 October 2018) that boasts a star-studded lineup of speakers, which includes the former US President Bill Clinton as the keynote speaker. The conference will also include a talk with BeeTech and InstaReM, recent members of RippleNet, about their experience making payments live between Brazil and Europe – faster and cheaper than the competition.
Among other noteworthy developments, a number of collaborations were announced in the overseas money transfer space across the globe last week.
State Bank of India is considering adopting Ripple remittance solutions to reduce the time it takes for international money transfers to go through. It is believed that Ripple’s presence in India will ease the current burden of expensive and slow money transfer solutions.
The Dutch bank ING has invested €21 mn for a minority stake in cross-border B2B payments company TransferMate. As part of the deal, ING will offer TransferMate as a payment processing option for all SME and corporate clients beginning in 2019.
UNPay, the global one-stop fintech open platform provider, has signed a strategic collaboration agreement with renowned HK financial technology company, Yunfeng. Under the terms of the agreement, UNPay will provide payment solutions and remittance services for Yunfeng Financial.
Western Union, the world’s largest money transfer company, announced partnership with Albertsons to enable consumer access to international and domestic money transfer and money order services, as well as bill payment services at Albertsons’ locations.
The London-based digital money transfer firm WorldRemit announced a partnership with Fidelity Bank, one of Nigeria’s top financial services providers, for instant money transfers to four million Fidelity Bank accounts in Nigeria.