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April 17, 2014
We thought our readers might want to stay up to date on recent developments in the international money transfer industry. Here are some articles to check out:
Excerpts from article:
What does Currency Cloud do? The company effectively competes against banks to win business from financial services companies whose business is to transfer and exchange money for others, be they individuals or other businesses. Banks currently control some 85% of international payments transfers.
Currently the startup is processing around $400 million of payments each month with payment processing currently growing a twelvefold rate year-on-year.
In 2013 there were $4.9 trillion worth of volume on cards in the U.S. in 82 billion transactions, according to data from the Electronic Transaction Association, the industry’s trade group — that’s 2.6K transactions per second.
Venture capital investment in payment technologies hit a five-year high in committed capital in the first quarter of 2014, when 59 startups raised $492 million for technologies to support, or supplant, existing payments companies.
Here’s Where Migrant Workers In America Send Their Money
According to Pew, migrants to the United States are responsible for sending almost a quarter of the global total of international remittances. We used the World Bank’s database of 2012 remittance flows to make a map showing which countries are the destinations for remittances from the U.S.
The World Bank has data on remittances from the U.S. to 155 different countries, adding up to a total of about $123 billion sent home by migrants.
The countries with the biggest flows were Mexico, India, China, and the Philippines. Mexico had almost $23 billion in remittances, and migrants from each of India, China, and the Philippines sent over $10 billion home.
Shaun Matsheza has gone through the process every month for over five years, ever since he came to the Netherlands. Armed with cash and a customer card, he shows up at Western Union’s bright yellow desk to send money back home to Zimbabwe. The cost to do so is high: on average, about 15 percent of the total money transaction. “And if something suddenly arises, and my family needs 40 euros or so, I have to pay the minimum fee of 17 euros,” says Matsheza, who is a journalist for Radio Netherlands Worldwide. “It can be ridiculous.”
One of the most routinely cited use cases for bitcoin is in the international remittance market – the financial sector worth over $500bn a year that specializes in facilitating transactions across borders at a markup that reduces the total money sent by 9% on average.
According to Andrew Brown, head of compliance at cross-border payments specialist Earthport, the current high fees in the traditional remittance market aren’t just imposed by greedy service providers.
According to The World Bank, $519 billion of remittance payments were made in 20121, mostly via traditional players such as Western Union and MoneyGram, as well as a plethora of smaller and informal operators.
WorldRemit with its online-only, cashless business model offers a more efficient, affordable and transparent remittance alternative to traditional money transfer operators2. Customers can send funds from 35 countries to families and friends in over 100 destinations.
The company currently enables more than 1.3 million annualised remittance transactions with the help of over 50 employees and expects to continue its rapid growth in 2014, expanding its staff to 200 employees by the end of the year.
We expect the online money transfer sector to account for approximately 30% of the remittance market in the next few years and that WorldRemit will be at the forefront of this change