Global remittances have soared in the past ten years, passing the $500 billion mark in 2015 according to the World Economic Forum. This growing market, long dominated by major banks and expensive wire companies which rely on brick and mortar establishments to make and receive payments, is ripe for innovation. The recent fintech revolution has seen a handful of start-ups developed to address remittances, including 2010 start-up WorldRemit, 2011’s TransferWise and 2014’s Revolut.
All of the new fintech remittance solutions aim to slash the prices associated with transferring money across borders and reduce transfer times as much as possible. Most of the solutions also attempt to offer more flexible possibilities for receiving money. All of which will pose a real challenge to the old guard of money transfers.
WorldRemit, which received early funding from Accel Partners and TCV, focuses on offering easy remittances to migrant workers at a fair exchange rate. They give recipients the chance to accept money as a “bank deposit, cash pickup, Mobile Money, or mobile airtime top-up,” freeing up those in the developing world to receive money without a bank account or debit card.
TransferWise, now one of the largest fintech startups, valued at over $1 billion, focuses on a more middle-class user base. A London based company, they had managed to claim 2% of the U.K. remittance market by 2015, according to Finovate. TransferWise claims to offer users the “mid-market” or interbank rate for their transfers, without extra fees for currency exchange. The startup has seen explosive growth, according to Business Insider: “the company is growing 15% to 20% month-on-month, and it has transferred more than $3 billion.”
Revolut, a relative newcomer to the remittance scene, recently received $66 million in Series B funding. The company has taken a broader approach, spreading beyond easy and affordable money transfers and including many of the more traditional banking features. They offer a banking app to track expenses and easily send or request money, making things like bill-splitting easy. The company has stated that they intend to use their latest round of funding to develop support for virtual currencies, allowing users to buy, sell, and trade currencies like BitCoin and Ethereum. All of their features are available for free in 23 currencies.
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