Saudi Arabia and the GCC: How to Tap into one of the World’s Biggest Payments Markets | IPR Global 2023

Join us for an enlightening panel discussion where our expert panellists will delve into the dynamic landscape of payment and remittance services within Saudi Arabia and the Gulf Cooperation Council (GCC) region.

Discover the latest market trends, regulatory insights, and technological innovations driving this vibrant sector. Gain valuable knowledge about consumer behaviour, cross-border remittances, financial inclusion initiatives, cybersecurity, sustainability efforts, and prospects.

Moderator:

Ibrahim Muhammad, Payments Consultant, Finxplor

Panellists:

Yasser Fathi Alkhouli, Chairman & CEO, Labbaik Global Ltd.
Nadeem Qureshi, CTO, USI Money
Saif Khan, President – EMEA, BILRS

What makes GCC such a significant region for payments and remittances?

The GCC has emerged as a powerhouse in the payments and remittances sector, with a staggering market value of $140 billion, a stark contrast from its valuation of $25 million in the early 2000s. This exponential growth underscores the region’s economic significance. What makes the GCC even more noteworthy is that two of the top three sending markets globally are from within its borders, namely the UAE and Saudi Arabia, as highlighted by Saif. The interconnection between migration and this surge in the payments market cannot be overstated, with approximately 30% of the world’s migrants residing in Gulf countries. This not only explains the current momentum but also points toward the untapped potential for further expansion. Saif’s insights into the UAE market, boasting around 10 million individuals with 9 million being expatriates, of which almost 60% are from Southeast Asian countries, provide a granular understanding of the diverse demographic contributing to the region’s payment dynamics.

Yasser adds another layer to the discussion by emphasising Saudi Arabia as the fastest-growing within the region. As Saudi Arabia strives to achieve its ambitious goals by 2030, the payments and remittances industry is set to play a pivotal role in shaping the economic landscape of the region.

What are the primary challenges and opportunities for businesses looking to enter or expand into key markets like Saudi Arabia and the UAE?

Entering or expanding into key markets like Saudi Arabia and the UAE presents a nuanced landscape of challenges and opportunities. Nadeem sheds light on the unique dynamics within the GCC, highlighting the differences in how countries operate internally despite shared interests like security and religion. He draws attention to the varying compositions of the migrant population, with the UAE boasting a highly skilled workforce (9 out of 10) compared to Saudi Arabia (4 out of 10), where the majority are labour workers.

Saudi Arabia’s policy to promote local employment aligns with its 2030 vision, however, cultural challenges are prevalent in the market, where large corporations grapple with stakeholders who may not easily comprehend intricate industry aspects. This calls for a need for simplification and effective communication strategies to navigate potential misunderstandings. Furthermore, the creation of new cities with unique laws and regulations essentially will form microcosms of countries within the country. This complex setup unveils opportunities within the sector, but it also demands a meticulous investigation into the business proposition.

Yasser points out the evolving nature of the market, where he specifically highlights Saudi Arabia’s ambitious city plans, such as NEOM, presenting a frontier of opportunities and ushering in a new era. With the planned expansion of the capital, Riyadh is to be five times its current size which signals the potential for businesses to establish a presence in these emerging zones. The country’s demographic consists of 75% under 40, whom are well-educated, which highlights the availability of skilled human capital, further enhancing the appeal for businesses seeking to enter or expand in these key markets. In essence, the challenges and opportunities are intricately woven into the unique fabric of each country, requiring a strategic and culturally sensitive approach for successful market entry and expansion.

How has the Saudi youth adapted to the digital landscape?

The youth’s seamless integration into the digital landscape, evident through active participation in conferences and tech exhibitions, has become second nature. This growing digital presence not only parallels the annual surge in new businesses but also cultivates a tech-savvy and readily available workforce. Yasser points out the restrictions the government has implemented on studying abroad, encouraging individuals to pursue their education domestically, to foster academic growth within the country. Notably, Saudi boasts one of the top 30 universities in the UAE, the King Abdullah University of Science and Technology. The ongoing trend of remote work, accelerated by the pandemic, has simultaneously opened new opportunities for Saudi youth to contribute to various industries from the comfort of their homes.

Despite the prevalence of migrants being employed for labour-intensive roles, Yasser points out the presence of global non-Saudi nationals in sectors like tourism. Recognising this diversity is crucial when analysing workforce dynamics in the region.

The mention of the Umrah pilgrimage, a significant event attended by millions of Muslims, brings attention to the unique religious aspects that businesses must consider. Yasser advises companies operating in the region should align their services with the principles of religion, particularly when catering to events like Umrah, where spending decisions are influenced by religious laws.

How can the payments industry contribute to improving financial inclusion in Saudi Arabia and the rest of the GCC, and what initiatives are currently in place?

Nadeem provides valuable insights into how the payments industry can play a pivotal role in enhancing financial inclusion, particularly focusing on Saudi Arabia. Financial inclusion, as he defines it, involves both participation in various transactional aspects and exerting control over the entire transaction process, from initiation to delivery. However, he notes that gaining approval from the Saudi Arabian Monetary Authority (SAMA) is a prerequisite, making entry difficult. He suggests an alternative route, collaboration with companies involved in different stages of the transactional chain.

The remittances sector poses a unique challenge due to the historical dominance of the top four players, often working closely with local partners. Nadeem proposes separating remittances from acquirers, PayFac, and tech providers, then strategically selecting components that foster financial inclusion. Overcoming hurdles for small and medium-sized enterprises (SMEs) is another focus, given the regulatory mandate for banks to engage with other banks. Nadeem suggests navigating this constraint by leveraging aggregators under the remittance umbrella to facilitate relationships and streamline the process.

Regulatory pressures have led to a reduction in the number of Money Transfer Operators (MTOs). The regulations dictate that to maintain their status, MTOs must refrain from establishing new global network relationships, indicating a shift in how remittances are managed, with a greater emphasis on the banking perspective. This contrasts with the situation in the UAE, where exchange houses wield more influence in the remittance landscape.

What are some incentives for Saudi startups in the Fintech landscape?

Yasser echoes Nadeem’s point that there has been a steady increase in new players and heightened competition in recent years. One crucial aspect is the intersection of regulations and payment products, presenting a significant opportunity for Fintech startups. Drawing parallels with the tourism industry’s success in introducing instalment payments, buy now pay later options, vouchers, and loyalty programs, Yasser suggests that similar tactics could be applied to the payments and remittances market. This strategic approach has the potential to boost transactions by 20-30% annually. While the technology is capable of offering these services, there is less utilisation of it in the current market.

To stand out in the competitive landscape, payment companies should incorporate creativity in diversifying their products and services. By tailoring offerings to resonate with the target audience and provide tangible benefits, companies can foster customer loyalty.

How are Fintech companies and startups contributing to the transformation of the payments landscape in the region? Can you share examples of successful innovations?

Saif provides valuable insights into how Fintech companies and startups are driving a transformative shift in the payments landscape of the region, citing significant growth indicators and successful innovations. Notably, he highlights a remarkable increase in fundraising for startups, with a staggering growth rate of 170% from $35 million in June 2023 to $95 million in July 2023. This substantial investment influx signifies the progress and potential of startups in the region, fueled by ambitious leadership visions such as Saudi Arabia’s 2030 plans and the UAE’s 2050 goals, aiming to double population, economy, and resources.

He further draws attention to the evolution of Fintech solutions, noting the regulatory clarity that now exists compared to the past. Previously, launching a prepaid program was challenging, but today, banking-as-a-service models operate under well-defined regulations, with clear licensing and specifications of their roles and responsibilities.

In terms of corporate expenses, Saif highlights a notable shift from traditional payroll methods to more streamlined processes involving gift cards and multi-currency cards. This transformation has made it easier for SMEs to manage their expenses through the implementation of advanced software and tools, eliminating tedious and time-consuming procedures.

The impact of the Wage Protection System (WPS), mandated by the Saudi Arabian Monetary Authority (SAMA) has played a crucial role in bringing many individuals into the banking sector, including the unbanked and underserved populations, thereby expanding financial services to a broader audience. Moreover, the entry of players from the US and UK markets indicates the global interest and recognition of the region’s fintech potential.

How do you see the adaption of AI and Blockchain technologies within the payments sector in the region?

The status of cryptocurrency, specifically Bitcoin, in Saudi Arabia exists in a legal grey area, it’s worth noting that no penalties or fines are imposed for its use currently. Nadeem suggests that the authorities are cautiously monitoring the situation, acknowledging the potential risks but also recognising the need to stay on top of global trends to meet its 2030 visions. While Saudi Arabia has not outright banned cryptocurrencies, it maintains a vigilant stance.

In contrast, blockchain technology is actively utilised in the GCC region, particularly in crypto-friendly locations like Dubai. Settlements, exchanges, and transactions involving Saudi Arabia often take place through facilities provided in neighbouring countries, such as the UAE. This cross-border utilisation showcases the potential of blockchain technology in facilitating seamless transactions within the region.

AI plays a major role in Saudi Arabia’s 2030 vision. The ambitious plan involves extensive implementation of AI technologies, particularly in new city projects that are heavily technology-driven. Biometrics, contactless payments, and various opportunities in the AI landscape are integral components of this forward-looking initiative.

Yasser points out the imminent surpassing of Saudi Arabia’s 2030 Vision within the next two years and the unveiling of the 2040 Vision in 2025. This rapid evolution indicates the country’s openness to new opportunities and its commitment to continually embrace and expand its technological landscape.

What do you foresee as the future trends and opportunities in the payments space in Saudi Arabia and GCC?

Yasser anticipates the transfer of dynamics from the tourism industry to the payments sector, foreseeing a replication of successful models in the years to come. He emphasises the versatility of Saudi Arabia, noting that consumer behaviour can vary between the northern and southern regions. This regional variability necessitates a thoughtful consideration of tailored products and services to cater to specific preferences in different areas.

Saif predicts a substantial growth in payments, with expectations of doubling or even tripling in the coming years. He highlights a significant shift in payment culture, noting the emergence of strong players in the remittance sector that offer a diverse range of services, such as bill payments and travel cards. While there has been a 35% shift to digital platforms, a substantial 60% of transactions still occur in brick-and-mortar stores. Interestingly, comparing this to the US market, people in the UAE are adapting digitally faster.

The role of population growth, driven by expats, startups, and investors also acts as a key factor in shaping the future of the payments landscape. The increasing economic activity and diversity in the population contribute to the expectation of ongoing growth and evolution in the payments sector.

What next?

At RemitONE, our commitment is to provide you with cutting-edge technology, compliance solutions, and expert guidance to navigate the ever-evolving landscape of remittances. Whether you’re just starting out or looking to scale your business, we’ve got you covered.

Want to see how RemitONE can elevate your business? Book a free consultation with our experts today!

Africa Remittances: Traversing the New Frontier | IPR Global 2023

This insightful session will explore the evolving landscape of remittances in Africa, with a key focus on the transformative impact of mobile money services and e-wallets. Our panel of experts will delve into topics like the role of innovative technologies, financial inclusion, regulatory challenges, and the potential to reduce costs and promote economic development through remittances.

Discover how these digital financial tools are reshaping financial ecosystems, empowering underserved communities, and fostering cross-border economic integration across the African continent.

Moderator

Priscilla D´Oliveira Friedman, COO, CrossTech

Panellists:

Temiloluwa Adesina, Senior Product Manager, Flutterwave
Ababacar Seck, Managing Director, Africa, RemitONE & IPR
George Boateng, Chief Operations Manager, Unity Link Financial Services Limited
Reynell Badoe, Head, Everyday Banking, Stanbic Bank Ghana LTD

What is the current landscape of remittances in Africa, and how has it evolved over the past decade?

Across the continent, every country heavily relies on inbound transactions, creating a diverse landscape characterised by various players, services, business models, and remittance types, including traditional, digital, and informal methods. Despite the challenges posed by the COVID-19 pandemic, the remittance market in Africa has proven to be remarkably dynamic and resilient, defying expectations of a decline in transactions. Comparing the present situation to the early 2000s, Ababacar highlighted the transformation from a market restricted by exclusive contracts favouring big players in international transactions to a more open and inclusive space that allows for domestic, regional, and international remittances. In the past, high prices were a significant barrier, but the advent of digital remittances has started to address this issue, although cash remains important due to cultural and behavioural factors.

The region’s people embrace digital tools but still value the human element. For example, using digital wallets for making in-person purchases keeping the face-to-face experience intact. It’s a reminder that, even in our tech-driven world, the human connection remains a crucial part of how Africans handle their finances.

There has been growth in various sectors, such as mobile money, payments, sending goods, and B2B remittances, indicating the expanding horizons of remittance services. Furthermore, the informal market, once overlooked, is now recognised as a major untapped opportunity in the evolving landscape of remittances in Africa.

George recalls how in the past there was a heavy reliance on fax for transactions, which could take up to a week, whilst the shift to bank deposits seemed promising for quicker transactions, the uptake was low due to financial exclusion. The prevalence of cash transactions in Africa posed challenges for cash pickup in banks, requiring identification. However, the digital revolution, with its elimination of such barriers, has unlocked the potential. The increasing role of Mobile Network Operators (MNOs), expanding rapidly across Africa, is a key driver of this growth, making the remittance landscape more accessible and promising for the future.

Reynell delves into the changing dynamics from a banking perspective. Historically, banks in Africa primarily focused on settlements, with the actual business of money transfers being led by Money Transfer Operators (MTOs) and Payment Service Providers (PSPs). Remittances, play a crucial role in contributing significantly to the GDP of African countries, with figures ranging from 5-6% in countries like Ghana and Nigeria, and up to 10% in other regions. This underscores the economic importance of remittances in the African context.

The regulatory environment in Africa presents a hurdle, slowing down the pace of innovation for banks. Unlike MTOs, many banks in Africa still operate in person, leading to higher operational costs. This insight showcases the need for adaptation and innovation within the banking sector to keep pace with the evolving remittance landscape in Africa. Despite these challenges, Reynells perspective highlights the immense significance of remittances for African economies and the imperative need for banks to navigate regulatory complexities to actively participate in the changing dynamics of the remittance market in the continent.

What should companies be thinking about when entering this market?

It’s crucial to have a well-thought-out strategy when venturing into the African remittance market. Licensing requirements, play a pivotal role in determining the speed of market entry. Partnerships are another key factor that can significantly accelerate the entry process, emphasising the collaborative nature of the industry.

You can easily tap into reliable partners to fast-track your entry into the market through RemitONE Connections to secure you with an instant business community that would take months and years to build yourselves within the Africa region. This also means you must have flexible technology with strong API integration capabilities to connect, RemitONE’s Money Transfer Platform is both modular and scalable. For more information get in touch with us at sales@remitone.com.

Temi suggests, a targeted strategy focused on specific regions is more effective rather than adopting a broad approach. For instance, in francophone regions of Africa where french is widely spoken as a second language, similar regulations and cultures prevail. By tailoring strategies to these specific regions with shared characteristics, one can enhance the effectiveness of market penetration.

George reassures that entering the market shouldn’t be daunting as specialists are available in every country to help guide you through the loops. However, a thorough understanding of the local customer dynamics, including their behaviour, attitudes, and cultural nuances is essential. He advocates for a more strategic approach that involves aligning with the demographic profiles of potential customers that resonate with the services your company offers. This perspective underscores the importance of cultural sensitivity, customer-centric strategies, and long-term relationship building as key considerations for companies seeking to successfully enter and navigate the African remittance market.

What innovative technologies and platforms are reshaping the way remittances are sent and received in Africa, and how are they increasing financial inclusion?

Mobile money has significantly altered the dynamics of remittance transactions with the help of the widespread ownership of mobile devices, coupled with increased telecommunications access, which has catalyzed a notable surge in remittances across the continent. Partnerships between remittance providers and telecommunications companies like Safaricom, have also played a pivotal role. This collaborative approach has proven instrumental in fostering innovation within the industry, creating a synergistic environment where different players work together to enhance services and accessibility.

Furthermore, the adoption of stablecoins, with the involvement of companies like Stellar and Ripple, is an emerging trend. These digital assets provide stability in value and are being utilised by companies to facilitate remittance transactions, offering an alternative to traditional currency-based transfers.

Interoperability, between mobile wallets, bank accounts, and cash through partnerships, is another critical aspect of the evolving remittance landscape in Africa. The seamless connectivity between various financial instruments and channels ensures a more inclusive and user-friendly experience for individuals sending and receiving remittances.

What challenges do African diaspora communities face when sending remittances, and how can these obstacles be addressed to improve the flow of funds?

High costs associated with remittances into Africa continue to persist, irrespective of the sending country, attributable to both financial and regulatory obstacles. Despite the advent of mobile money, Reynell believes certain African countries still heavily rely on physical locations such as banks or MTOs, posing difficulties for beneficiaries in accessing funds.

Additional challenges faced by the underbanked, particularly in rural areas and villages, where limited access to banks poses a significant barrier. Foreign exchange (FX) fluctuations were identified as another obstacle, leading to reduced amounts being received by the recipients. In addition, regulatory challenges also extend to the senders, particularly undocumented migrants who wish to send funds. The need for proof of address or source of funds presents a barrier, hindering their ability to send remittances until these documents are provided. To mitigate this challenge, George proposes that an alternative solution would involve embracing informal money transfer methods as well as the increasing interoperability between MNOs which will provide new opportunities for more efficient and cost-effective money transfers.

Ababacar further observes that while Africans can travel between countries with just their ID, the requirement for a passport when sending money presents a misunderstanding and inconsistency that act as barriers to entry for remittances from the diaspora. This discrepancy in identification processes poses a challenge, adding an unnecessary layer of complexity for individuals attempting to send funds.

He further points out the lack of interoperability across the continent. The absence of a unified system restricts some diaspora communities from utilising MNOs as a viable option for remittance transactions. This limitation not only hinders the accessibility of services but also contributes to the overall challenge of navigating the remittance landscape.

Also, within many MNOs, there isn’t an available option to transact money in different currencies. This lack of flexibility in currency options adds another layer of complication for the diaspora communities attempting to send funds across borders.

To tackle these challenges, improving identification processes by harmonising them with the adaptable regulations in Africa may help alleviate inconsistencies in requirements. Furthermore, fostering interoperability across the continent would amplify the accessibility of remittance services for diaspora communities. Urging MNOs to offer transaction options in various currencies would significantly ease the flow of funds, catering to the diverse needs of the African diaspora.

What innovations are emerging within the mobile money ecosystem that have the potential to further enhance the convenience and efficiency of remittance transactions?

Mobile money services have notably increased accessibility by introducing digital wallets accessible through mobile phones. These mobile wallets have evolved beyond simple remittance tools and can now function similarly to bank accounts, offering users the ability to engage in activities such as loans, savings, bill payments, and more through dedicated mobile apps.

The widespread adoption of mobile wallets has spurred further innovation, with the integration of technologies like artificial intelligence (AI) to assess credit scores. This, in turn, enables the provision of loans and overdrafts based on users’ spending patterns, showcasing a holistic approach to financial services within the mobile money ecosystem.

George highlighted the cultural integration of mobile wallets in African daily life, noting that some individuals receive their salaries exclusively through mobile wallets. This trend has led to mobile wallets becoming integral to people’s lives, so much so that even transport providers can be paid using mobile money. The efficiency and convenience offered by mobile wallets have positioned them as more than just a substitute for traditional banking; they have become the preferred choice for many. Euromonitor International found in the sub-Saharan African region, there were over 600 million registered mobile money accounts, facilitating transactions exceeding USD 600 billion in 2022, with it expected to grow even more in the coming years, especially with the help of central banks reducing barriers to entry.

Moreover, George speculated on the future trajectory, foreseeing a potential end to the dominance of cash in the coming years. However, he acknowledged that this transformation depends on continued investments in the economy and the infrastructure required for the digital revolution to take root.

Priscilla added to this narrative by drawing parallels with Brazil, where digital payments, exemplified by Pix payments, have also been gaining prominence. These digital payment methods contribute significantly to driving economic growth, simplifying transactions, and mirroring the trend observed in the African mobile money ecosystem.

What next?

Want to see how RemitONE can elevate your business? Book a free consultation with our experts today!

RemitONE Feature Focus Webinar: Securer Transactions, Anti-Fraud Tools & White-Label Mobile App

In this webinar, our speakers will unveil powerful tools to combat fraudulent onboarding, ensure secure transaction management on both Android and iOS, and gain centralised control of your branded mobile app for seamless operations.

Each quarter, we will host live webinars to explore and demonstrate updates and improvements to the Money Transfer Engine, and chat with our valued clients about features they want to implement or wish to see in the future.

For more information on enabling new features on your system, contact support@remitone_admin

What next?

Want to see how RemitONE can elevate your business? Book a free consultation with our experts today!

Mastering Modern Compliance: Adapting to the Changing Landscape and Overcoming De-risking

The essence of your money service business (MSB) survival lies in compliance. Every passing year brings forth changes, demanding continuous vigilance to keep pace with evolving laws and regulations, ensuring sustained compliance for business operations.

Join us in this discussion as we explore the dynamic trends shaping compliance, uncovering strategies to proactively anticipate and adapt to upcoming changes, enabling businesses to stay ahead.

Moderator

Rob Ayers, Business Development, Bates Group

Panellists:

Ibrahim Muhammad, Senior Payments Consultant, Finxplor
Nadeem Qureshi, CTO, USI Money
Jonathan Jensen, Global Regulatory Policy Advisor, GBG

How has the landscape of compliance in payments and remittances changed over the years and what are the driving forces behind these changes?

Ibraheem reflected on the earlier era in the mid-’90s when operations took precedence over compliance, with front offices catering to customers and back offices managing processes without dedicated compliance teams. However, events like 9/11 marked a turning point, prompting companies to recognise the vital role of compliance and the necessity for dedicated compliance teams. Ibraheem believes technology advancements, regulatory changes, and evolving customer expectations as the primary driving forces behind these changes.

Jonathan also observed a heightened emphasis on a risk-based approach in recent years, noting a departure from rigid, prescriptive regulations to more flexible frameworks

Nadeem echoed the sentiments of his fellow panellists and shed light on the pandemic-induced surge in regulatory pressure, compelling firms to prioritise operational resilience programs. Regulators increasing demand on firms to implement such programs was another noticeable shift, reflecting the evolving nature of compliance requirements in response to global challenges.

Can you provide examples of regulatory changes which have had a significant impact on the payments and remittance industry? How have organisations adapted to comply with these changes?

In the wake of the pandemic, there’s a growing emphasis on implementing resilience and operational strategies. There are concerns firms are unprepared for the Consumer Duty regulation that commenced in July 2023. This regulation demands higher standards for customer care, aligning products/services with customer needs, and ensuring fair pricing. Nadeem discussed essential considerations for firms, such as ensuring tailored customer services for individuals with disabilities and effectively identifying the needs of vulnerable customers. He cautioned that many firms have yet to implement these regulations in their operations, suggesting seeking advice from advisors, consultants, and relevant departments to avoid potential penalties for non-compliance.

Jonathan also noted a recent regulatory change acknowledging the advantages of technology. He highlighted the Joint Money Laundering Steering Group’s (JMLSG) publication advocating for biometric checks to prevent fraudulent onboarding, showcasing a regulatory shift towards acknowledging and leveraging technological advancements for enhanced security and fraud prevention in the industry.

We at RemitONE have recently collaborated with GBG to introduce the RemitONE Liveness feature™, a vital defence for our clients in today’s technology-driven world. The risk of impersonation looms large, causing considerable financial losses for companies due to fraudulent activities. Therefore, safeguarding your system with this tool is crucial to combat fraudulent onboarding effectively.

This technology includes liveness testing, which alongside facial biometrics, detects fraudulent attempts such as deepfake images or silicone masks used during selfie submissions. This ensures that the submitted biometric data originates from a genuine person who is physically present. By equipping your systems with this tool, you can effectively prevent fraudulent onboarding, reducing the risk of severe financial losses and potential damage. Looking ahead, such advancements promise a future where companies can safeguard their operations more effectively, fostering trust and security with their customers.

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What are the primary reasons behind financial institutions’ decisions to de-risk and how can payment providers mitigate the impact of de-risking on their operations?

There is a growing need for stringent policies within banks to combat financial crime, highlighting the persistent challenge posed by cross-border regulatory disparities, as noted by Nadeem. Banks weigh commercial viability and transactional volume heavily, often leading to sector exits. However, with the evolving landscape, there are more available options like payment service providers and EMIs offering umbrella accounts, catering to small and medium-sized enterprises (SMEs) transfer operators.

There are also different regional variations approaches to de-risking. Ibraheem referenced a case where a UK politician’s account closure, sparked media attention on political implications, which led the FCA to address the issue, by tightening regulation. Stakeholders should take a collaborative approach in the payment ecosystem for a more nuanced, risk-based approach rather than blanket policies. There is also a UK trend of reluctance in onboarding PEPs due to high incorporation costs, this reinforces the need for a risk assessment based on sectors and jurisdictions rather than denying access. This approach could streamline onboarding while minimising risks associated with certain customers.

The panellists collectively agreed with the necessity for adaptive, risk-centric approaches within financial institutions to mitigate de-risking impacts on payment providers and foster a more inclusive yet secure financial landscape.

What role does customer due diligence (CDD) play in modern compliance efforts and how can organisations balance customer experience with the need for rigorous customer due diligence requirements?

CDD is the core of compliance, but there needs to be a balance between conducting necessary checks without disrupting the customer experience, as expressed by Jonathan. Leveraging appropriate technology to streamline processes and ensure a seamless experience for customers while effectively fulfilling CDD requirements is crucial.

Ibraheem highlighted the varying approaches taken by companies, tailoring due diligence based on regions and types of products or services offered. He explained that transactions to high-risk jurisdictions warrant enhanced due diligence, while those to lower-risk areas could involve less stringent checks for customer convenience. Additionally, Ibraheem pointed out that different services, such as cash pick-ups versus account transfers, require varying levels of scrutiny, aligning due diligence with the nature of the service provided.

Nadeem echoed the sentiments of Jonathan and Ibraheem, emphasizing the importance of aligning enhanced due diligence (EDD) with the commercial model, service type, and territorial risks. He underscored the benefits of applying a risk-based approach, suggesting that robust internal systems established through such an approach can yield long-term benefits for organisations in compliance efforts.

What next?

Want to see how RemitONE can elevate your business? Book a free consultation with our experts today!

Navigating the Payments and Remittance Landscape: Trends, Predictions, and Pioneering Progress

The remittance landscape is in the midst of a remarkable transformation. From customer-focused innovations like mobile wallets, streamlining the remittance process, to the incorporation of artificial intelligence (AI) for more efficient operations. As we navigate through this changing financial terrain, it’s crucial to understand the evolving customer needs, which are increasingly leaning towards digital solutions for convenience and efficiency.

This article will unlock valuable insights into the trends and strategies shaping the payments and remittance industries whilst uncovering the challenges and opportunities that lie ahead.

Moderator:

Leon Isaacs, CEO & Founder, DMA Global

Panellists:

Wayne Gould, Head of Financial Services, Trust Payments
Sukhi Srivatsan, Head of Account Management, AZA Finance
Olufemi Olaogun, Head of Payments and Financial Institutions, Leatherback
Richard Meredith, Head of Sales and Key Partners, Moneygram

What are key developments in the remittance landscape to look out for?

One key development which has emerged prominently in the remittance landscape is a growing emphasis on customer-oriented progress, as highlighted by Sukhi. This shift is evident through innovations like the invention of mobile wallets, designed to facilitate quick and hassle-free transactions for users. Mobile wallets have not only simplified the remittance process but have also enhanced the overall user experience, making it more convenient and accessible for a wider range of customers.

Another interesting and ongoing dynamic in the remittance sector revolves around the mobilisation and automation of payments to achieve greater efficiency. This involves the utilisation of cutting-edge technologies like AI to carry out repetitive tasks, thereby liberating valuable time for teams to concentrate on more critical and strategic areas. By leveraging AI in this manner, businesses in the payments and remittance space can significantly accelerate their progress and drive better results, all while ensuring that their operations remain swift and precise.

Multiple panel speakers also voiced blockchain and open banking to be game-changers. The integration of blockchain technology has simplified the movement of money, creating a more efficient and secure environment for processing transactions. Open banking, on the other hand, has enabled a more seamless and interconnected flow of funds. Together, these developments are propelling the industry toward a future where payments and remittances are not only faster and cost-effective but also imbued with a higher degree of transparency and security, ultimately benefiting merchants, financial institutions, and consumers alike.

What data or statistics highlight the future growth of the money transfer industry?

Customer expectations in the realm of remittances are undergoing notable shifts, as outlined by Richard. Despite economic downturns and recessions, the desire for people to respond to the financial needs of loved ones back home remains remarkably resilient. Notably, millennials are increasingly turning to digitalised methods for sending money, highlighting a growing preference for convenience and efficiency. A Moneygram survey revealed that over 80% of respondents expressed a willingness to send money back home, even in the face of economic challenges.

It’s important to note that these evolving expectations can vary significantly between geographical markets. For instance, in Mexico, more than 90% of individuals visit physical stores to collect their remittances, while in India, the approach leans more towards account-based methods. This geographical variance underscores the importance of tailoring strategies and pricing to meet the specific demands of each market.

In addition, as pointed out by Olufemi, customers now place a premium on the speed and cost-effectiveness of fund transfers. In essence, the evolving landscape of customer expectations in remittances is characterised by a growing demand for convenience, efficiency, and competitive rates, driving the industry to adapt and innovate to meet these changing needs.

What are some successful partnership case studies within the remittance or payments industry?

Leatherback forges partnerships to address a common challenge where customers may be uncomfortable conducting transfers with Money Service Businesses (MSBs) that lack a bank account. This collaboration ensures that businesses can continue their operations without the need for establishing local accounts in various countries, such as Nigeria, South Africa, or Ghana. This partnership-driven approach streamlines the process, eliminating potential bottlenecks and minimising expenses that would otherwise be associated with creating an internal team to handle these complexities.

Recognising the popularity of mobile wallets on the continent, Moneygram has built pivotal relationships with companies such as AZA Finance, Trust Payments, and strong partnerships in Ghana, including Z-pay. These collaborations have been crucial in expanding Moneygram’s reach and enhancing its ability to serve a broader receiving network. In India, where account-based money transfers are prevalent, this strategy has effectively reduced the digital side cost base, enabling Moneygram to diversify and enhance its product offerings in response to the ever-changing consumer demands.

Furthermore, Moneygram is actively exploring innovative solutions like blockchain technology, particularly with its partnership with Stellar. This initiative aims to facilitate the instant transfer of remittances to digital wallets, bridging the gap between traditional cash and cryptocurrencies. Notably, this approach holds the promise of reducing costs in the future, a significant advantage in the rapidly growing landscape of remittances. The success stories shared underscore the importance of adaptability and collaboration in navigating the remittance industry.

Can you share insights into business strategies that effectively utilise innovation whilst being cost-effective? Additionally, how do you approach security and fraud prevention strategies?

Some businesses may have deep-rooted traditional methods and personal client relationships, making the transition to online operations a significant paradigm shift. Wayne delves into how Trust Payments takes a consultative approach, employing dedicated teams that work closely with Money Transfer Operators (MTOs) to swiftly resolve issues, ensuring a strong connection to the business. They also focus on data-driven insights to provide a comprehensive view of their clientele, facilitating fraud prevention and ID verifications. He also shares how Trust Payments goes a step further by sharing data on popular fraud prevention parameters with their clients, allowing them to tailor their settings to their liking, therefore promoting an ecosystem of collaborative security and innovation.

Sukhi emphasises the critical role of compliance in safeguarding businesses and underscores the need to maintain security while pursuing innovation. She mentions the availability of consultancy services and tools that reduce manual intervention and human errors. These partnerships enable companies to cut costs and lower fraud rates, ultimately delivering more value to customers. Sukhi also highlights the importance of collaboration with regulators to navigate the legal framework and risks within the market, particularly in frontier markets. Recognising that many regulators in these regions cannot fully address the industry’s needs, she advocates for the industry’s engagement with governments and international bodies to bolster resources and foster a more secure and innovative environment.

What key steps or strategies are in place to improve financial inclusion?

Sukhi shed light on the steps taken to enhance financial inclusion, particularly in less developed markets. AZA Finance takes a comprehensive approach when entering new markets. They diligently study each partner’s tools and APIs, aiming to integrate with various financial providers, including banks, cash providers, and wallet services, based on the prevailing market preferences. What sets this approach apart is the recognition that in less developed markets, these APIs and tools are different from those found in more mature and open banking environments. In these frontier markets, the technical infrastructure may be less developed.

To bridge this gap and ensure financial inclusion, AZA Finance takes the initiative to engage with local staff and service providers. They establish a presence on the ground, engage in regulatory compliance, and establish connections with these providers to grasp how payments can be made into the preferred receiving methods of local consumers. By doing so, they consolidate these solutions and make them accessible to their business partners. This approach alleviates the need for each business to navigate the complexities of each market individually, ultimately contributing to the broader goal of financial inclusion. In essence, AZA Finance’s strategy exemplifies the importance of adaptability and personalised engagement in expanding financial access to underserved populations.

Richard also shared his ideas, where one strategy entails integrating the ability to manage all financial transactions within digital wallets. This means individuals can use their wallets not only for sending and receiving money but also for tasks such as paying bills and buying groceries. By interweaving money transfers into the fabric of these everyday financial activities, financial inclusion can be significantly enhanced.

One case study is of Safaricom in Africa, which initiated a journey towards financial inclusion by offering various financial services through its mobile platform. This successful model has since been adopted by various countries, not only in Africa but also in South America and Asia, contributing to broader financial accessibility.

While substantial progress has been made, there are still challenges in some regions due to varying levels of technology adoption and industry-player cooperation. In some cases, governments are actively engaging in discussions around fintech to boost financial inclusion. An intriguing example shared by Richard was the Turkish post office’s response to recent earthquakes. They swiftly set up booths in the affected areas to provide financial services, illustrating how financial inclusion can take different forms depending on each country’s unique circumstances and needs. The pursuit of financial inclusion remains a dynamic and evolving journey, tailored to diverse contexts and constantly adapting to better serve communities worldwide.

What opportunities are there for new players entering the remittances or payments market?

Adaptability is key for survival and success. Technology providers and fintech-based payment providers play a pivotal role in facilitating businesses of all sizes. These entities can assist not only in embracing the latest technologies but also in deploying effective marketing strategies to propel growth.

Partnerships are another avenue for newcomers to explore. Wayne highlights how Trust Payments, for instance, collaborates with various providers, including compliance, regulatory, and remittance as a service platform. These partnerships bring expertise to the table, allowing merchants to establish themselves more swiftly and efficiently than they might expect.

The success of new entrants in this competitive industry depends on having the right team and partners to expedite growth and expansion.

What next?

Want to see how RemitONE can elevate your business? book a free consultation with our experts today!

RemitONE partners with GBG for global identity verification and AML compliance solutions

21^st September, 2023: RemitONE is thrilled to announce its strategic partnership with GBG, a global expert in digital location, identity verification, and fraud prevention software. This collaboration empowers Money Transfer Organisations (MTOs) worldwide to effectively verify customer identities across the globe, maintain regulatory compliance, and streamline customer onboarding.

Now, RemitONE users can seamlessly harness GBG’s cutting-edge capabilities through the renowned RemitONE Money Transfer Platform. This partnership addresses critical challenges faced by MTOs, including:

Onboarding a diverse and global customer base

Confidently onboarding good customers and managing high-risk individuals and businesses by verifying customers on an ongoing basis for politically exposed persons (PEPs) and sanctions checks
Ensuring compliance with anti-money laundering (AML) regulations
Cost efficiency

RemitONE partners with GBG as they are the global leaders in identity verification and fraud prevention. GBG’s solutions are one of the most cost-effective on the market and make compliance easy for RemitONE’s clients.

In GBG’s recent Global State of Digital Identity 2023 report, only 30% of businesses said that they screen customers against PEPs and sanctions lists. Find out more key insights here: GBG’s Global State of Digital Identity 2023 report

Take advantage of the RemitONE and GBG partnership by contacting marketing@remitone.com

About RemitONE

RemitONE is the leading provider of money transfer software solutions for banks, telcos, and money transfer operators (MTOs) worldwide. Organisations of all sizes use the RemitONE platform to run their remittance operations with ease and efficiency by reaching out to their customers via multiple channels including agent, online and mobile.

About GBG

GBG is the leading expert in global digital identity. Combining their powerful technology, the most accurate data coverage, and talented team to deliver award-winning location intelligence, identity verification and fraud prevention solutions.

With over 30 years’ experience, GBG bring together a team of over 1,250 dedicated experts with local industry insight from around the world to make it easy for businesses to identify and verify customers and locations, protecting everyone, everywhere from fraud.

Learn more at www.gbgplc.com and follow us on LinkedIn and Twitter (@gbgplc).

For more information on RemitONE, please email marketing@remitone.com

Innovation in Payments and Remittances (IPR) Awards | Finalists Announced!

We are thrilled to announce our finalists for this year’s IPR Awards. The IPR Awards is a prestigious event celebrating the exceptional achievements of the money transfer community’s best and brightest.

This year, we introduced six unique award categories including:

Innovation Award
Exceptional Customer Experience Award
Social Impact Award
Start-Up of the Year
Scale-Up of the Year
Leader of the Year

IPR Award Ceremony

Join us for our awards ceremony on Tuesday 26 September during IPR Global 2023, London, UK! Get ready for an amazing evening as we announce the winners of our esteemed awards. Enjoy a relaxed standing reception with delicious drinks and tasty canapés. The highlight of the night will be the award presentations at 7pm.

Don’t miss out on this special opportunity to celebrate excellence and network with industry leaders. Secure your ticket before our early bird discount ends this Thursday 31st August 2023!

Visit: https://global2023.ipr-events.com/register

Congratulations to all the shortlisted companies and individuals

Innovation Award

Commercial Bank of Ceylon PLC
Currencycloud
Daytona
Hub Remit Pvt. Ltd
Sikoia
TerraPay

Exceptional Customer Experience Award

Commercial Bank of Ceylon PLC
PayInc Group Limited t/a PayAngel
TerraPay
Trust Payments
Unity Link

Leader of the Year

Jones Amegbor – Founder and CEO – PayInc Group
Ani Sane – Co-founder & Chief Business Officer – TerraPay

Scale-Up of the Year

Clear Junction
Remit Choice Limited
Samsara Remit

Social Impact Award

HelloPaisa
NOW Money
PayInc Group Limited t/a PayAngel

Start-Up of the Year

LolliCash LLC
PayOnlime
UMBRELLA CONSULTANTS LTD T/A BROLLIE

Once again congratulations to all the winners and we look forward to welcoming you to the IPR event.

Understanding the basics of Remittances: World Of Payments IPR Training – Key Takeaways

Last month, we successfully launched our first IPR training session, led by our esteemed payments expert, Ibrahim Muhammed. With a remarkable track record of over 20 years in the industry, Ibrahim brought unparalleled expertise and insights to the program.

Designed specifically to enhance participants’ knowledge and skillset in the money transfer industry, our series of trainings aim to educate and propel individuals forward in their professional journey.

Our first training kicked off with World of Payments, an introduction to the fundamentals of the key concepts and dynamics of the remittance industry. If you couldn’t attend the live sessions, don’t worry as you can still sign up at a reduced rate and access the on-demand session.

It’s a great opportunity to enhance your expertise, earn CPD points, and secure a certification. You can register online here: https://payments2023.ipr-events.com/register

Now let’s dive right in and explore some of the key takeaways from the 2-day online sessions.

The Surging Importance of Remittances for Economic Growth

The impact of remittances on economic growth in developing nations cannot be understated. In 2022, countries received transfers worth over $700 billion from diasporas working abroad. These funds serve as a critical source of income for families, bolstering their purchasing power, healthcare access, and educational opportunities.

Interestingly, remittances have surpassed other categories, including foreign direct investments, in their contribution to economic growth. This substantial inflow has prompted global jurisdictions to impose stricter sanctions, emphasizing the need for formal remittance channels that promote transparency and traceability of funds.

Understanding the Remittance Ecosystem Players

A crucial aspect of achieving success in the payments industry is understanding the diverse roles of participants within the remittance ecosystem. From financial institutions to technology providers, regulators to consumers, each stakeholder plays a vital role in facilitating the seamless transfer of funds across borders. By comprehending the complexities of this ecosystem, MSBs can identify potential partnerships and collaborations that align with their business goals, fostering growth and expansion.

Forming Effective Partnerships with Aligned Goals

Collaborating with the right organisations can unlock new opportunities, expand your customer base, and enhance service offerings. By joining forces with compatible organisations, you can benefit from each other’s strengths and drive mutual growth. Actively building and nurturing these partnerships can help enable long-term success.

Rise of Prepaid Cards and Wallets

Ibrahim shed light on the growing prominence of prepaid cards and digital wallets as convenient and sustainable payment options. With their ease of use, accessibility, and flexibility, these solutions offer a viable alternative to traditional banking systems. MSBs can leverage prepaid cards and wallets to tap into new customer segments, enhance financial inclusion, and provide seamless cross-border transactions.

IPR Training Sessions – Offering CPD Points and Certification

We have more exciting upcoming events you can sign up for. Discover the full schedule of events and reserve your spot now at: https://www.ipr-events.com/.

Remember, tickets are limited and allocated on a first-come, first-served basis. To ensure your participation please secure your seats early.

Don’t miss out on these exclusive opportunities to expand your knowledge, connect with industry experts, and stay at the forefront of cutting-edge developments.

We look forward to seeing you in our IPR training sessions!

Clear Junction Partners With Innovation in Payments and Remittances (IPR)

We’re thrilled to announce that Clear Junction, a leading global payments company, will be a Platinum Sponsor for the upcoming Innovation in Payments and Remittances (IPR) Global 2023 event. Explore the exclusive article below directly from Clear Junction, where they delve into their company mission, key values and the importance of partnering with brands like IPR.

Clear Junction is excited to be sponsoring IPR Global 2023. As a leading global payments company founded by a veteran team of financial professionals, we have worked tirelessly to build and develop our proprietary technology to facilitate an end-to-end regulated payments solution.

Innovation in Payments and Remittances (IPR) unites and inspires leaders with a strong drive to revolutionise the money transfer sector, bringing together industry stakeholders, visionaries, and business leaders to drive positive change in the industry. At Clear Junction, we help Financial Institutions gain access to a wide range of features such as accounts, virtual IBANs, payment networks, FX, and e-Wallets in a swift, secure, and compliant manner. Our sponsorship underscores their commitment to promoting interdisciplinary approaches and advancing knowledge exchange.

By partnering with us, our clients overcome the complexities associated with establishing banking relationships for international payments. They can tap into new markets and emerging technologies while streamlining their accounts and payment processes. This, in turn, simplifies the management and servicing of their customers, making managing and servicing their customers easy and convenient. Through an advanced infrastructure, Clear Junction enables swift and reliable movement of funds across borders, empowering businesses to expand their reach and cater to a global customer base.

Compliance and risk management are at the heart of everything we do

The last few years have demonstrated the importance of being steadfast and secure in your compliance, and at Clear Junction, it is woven into our strategy. We recognise that maintaining regulatory compliance is crucial for fostering trust, ensuring security, and mitigating risks throughout the financial ecosystem. Following regulations can pave the way for digital currency companies to tap into traditional banking services, which is crucial for growth and innovation.

In response to the recent regulatory pressures, we launched our escrow account solution to ensure protection for those wishing to trade in digital currencies and fiat. As far as it’s known, the new escrow accounts solution is the first of its kind in the payment space: Clear Junction acts as a settlement agent and provides a fundamental financial service that ensures each entity involved in a fiat/crypto transaction gets what they agreed to. Relying solely on the transaction data available publicly on the blockchain, all parties get exactly what they expect. Clear Junction acts as an independent entity providing the escrow accounts to guarantee peace of mind for both participants.

The future is through collaboration

The widespread adoption of technology within the financial industry, and the heavy streams of data being poured through financial institutions daily, have meant that compliance regulations have become increasingly complex and intricate. Maintaining compliance with regulatory standards is central to how we function as a payments company and underlines everything we do.

By facilitating collaborations between professionals from various fields, this event promotes interdisciplinary research that has the potential to address these complex challenges. The future is built by everyone, and we are delighted to be part of such a diverse network of industry professionals, policymakers and researchers. We are excited to see what ideas this event will bring.

We are beginning a new age in the digital payments space, and it’s an exciting place to be. We collectively have an opportunity to help write the next chapter. It is a long road to map out ahead, but we need to look for sustainable, long-term practices. This sponsorship serves as a testament to Clear Junction’s dedication to supporting initiatives that foster innovation, drive positive change, and contribute to the advancement of knowledge across industries.

To learn more about the new partnership with Clear Junction, get in touch at marketing@remitone.com

Secure your tickets to IPR Global, the 2-day hybrid event taking place in London, UK.

Register here: https://global2023.ipr-events.com/register

Video | Unlocking Success: Launching Your Money Service Business with Purpose

Discover the key steps to launching a thriving Money Service Business (MSB) in our latest video. Join Ibrahim Muhammad, a senior consultant with over 20 years of experience in Money Transfers, as he delves into the “why, how, and what” of starting an MSB.

Gain insights into defining the purpose of your business, addressing the requirements for success, and specifying your unique offerings. This video provides a comprehensive roadmap to help you navigate the challenges and opportunities in the MSB industry. Don’t miss out – watch the video now!

Ready to dive deeper into launching your own MSB?

Contact our expert consulting team at RemitONE today and organise a free 30-minute consultation. Let us guide you towards success and help you get your money service business up and running as fast as possible. Schedule a free consultation with our experts: