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? 

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!

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

21st 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  

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 

Video | Managing Anti Money Laundering (AML) and Compliance for your Money Service Business

To ensure the smooth and secure operation of your business, it’s essential to be diligent in navigating AML requirements while remaining compliant with the latest regulations in your operational regions. In our third instalment of the ‘How to Start Series,’ Ibrahim delves into one of the fundamental pillars of your Money Service Business (MSB): Anti-Money Laundering (AML) and Compliance, he guides you through the essential steps such as:

  • Implementing a risk-based strategy tailored to your products/services.
  • Establishing a comprehensive AML and compliance framework, including its key components
  • Selecting the appropriate software technology that has the right capability to support your needs

Find out the insightful strategies to safeguard your MSB against potential threats, watch the full 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:

IPR Training: AML and Compliance for Money Service Businesses Key Takeaways

In a rapidly evolving financial landscape, combating money laundering (AML) and ensuring compliance has become highly essential for money service businesses (MSBs). Two weeks ago, we hosted our second Innovation in Payments and Remittances (IPR)  training session, focusing on AML and compliance strategies tailored to the unique needs of MSBs. 

In this article, we’ll delve deeper into the key highlights discussed during the session for you to gain key insights from.

If you couldn’t attend the live sessions, don’t worry as you can still sign up at a reduced rate and access them on-demand.

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 sessions.

1. Differentiating Terrorist Financing and Money Laundering: Recognising Patterns

Distinguishing between Terrorist Financing and Money laundering is vital in developing targeted prevention strategies. The training session highlighted that while both activities involve illicit financial transactions, they often exhibit different characteristics. Terrorist financing can be sourced through legitimate funding, unlike money laundering where its origin is from criminal activities and financial crime. 

Money laundering frequently involves larger amounts aimed at concealing the illegal origins of funds whilst Terrorist financing comprises of small, discrete transactions intended to avoid suspicion.

Noticing these unusual large or small transactions can be a key indicator of potential terrorist financing, allowing businesses to act quickly and prevent the flow of funds to harmful causes.

Furthermore, MSBs should set up appropriate monitoring mechanisms and transaction thresholds to better identify and report suspicious activities that align with the specific patterns of these crimes. This way MSBs can reduce the likelihood of criminal activity being carried out through their business.

2. Structured KYC Procedures: Gateway to prevent Money Laundering risks

As the starting point for any business relationship, a structured and rigorous KYC process enables MSBs to verify the identity of their customers, assess the legitimacy of their transactions, and detect potential red flags. By obtaining and verifying relevant information such as customer identification, source of funds, and purpose of transactions, MSBs can create a comprehensive customer profile that aids in identifying suspicious activities. Effective KYC practices also enable MSBs to establish a strong foundation for ongoing due diligence and monitoring.

Recognising that every MSB operates within a distinct operational context, it’s crucial to design risk assessments that address the specific needs and characteristics of each business. This approach ensures that potential vulnerabilities are identified and addressed effectively. By analysing factors such as transaction volume, customer profiles, geographic scope, and business relationships, MSBs can develop risk assessment frameworks that accurately reflect their exposure to money laundering and other financial crimes.  

RemitONE’s Compliance Manager™ (COM) features a set of compliance features to ensure enhanced detection of fraudulent money. Some of the features include:

  • Linked Transaction Detection: will detect multiple transactions sent by the same remitter to different beneficiaries or multiple remitters to the same beneficiary. This will help you notice any suspicious activity you need to alert authorities of immediately.
  • NameMatch™: Eliminating the need for manual cross-referencing against international sanction lists, our technology streamlines the process, ensuring greater efficiency. The system cross-checks against multiple sanction lists and accommodates the addition of custom lists. Moreover, seamless integration with external Compliance List Services, such as Reuters’ WorldCheck, Experian, and GBG, widens the spectrum of available lists, encompassing PEP lists as well.
  • Dynamic risk scoring: Conduct personalised risk assessments utilising assigned scores ranging from 0 to 100 for Remitters and Beneficiaries. This score continually adjusts in response to a range of variables, encompassing factors like source country, nationality, individual versus corporate affiliations, and name screening outcomes.

If you’re interested to integrate COM™ into your system contact us at sales@remitone.com.

3. A Compliance Officer/MLRO is crucial

Delving deeper, Ibrahim emphasised the fundamental role of a Compliance Officer or Money Laundering Reporting Officer (MLRO) in combatting money laundering. There are four essential components he advised to keep in mind when selecting the right candidate:

  1. Qualifications: The compliance officer must possess a strong foundation, supported by relevant qualifications and certifications. Their background should reflect a deep understanding of AML practices to effectively help them navigate the complexities of compliance. They should have a minimum of one year of practical experience in the field and hold credentials related to AML/compliance, endorsed by international standard organisations.
  1. Championing Independence: Independence is key as the compliance officer controls AML policies, risk assessment, internal controls, and training. Furthermore, their decision-making process should remain uninfluenced by other team members, as external interference can cloud their perspective and make them compromise compliance.
  1. Dedication Demanded: the compliance officer should be a dedicated, full-time member of the team to ensure a high level of monitoring. While certain operational aspects can be outsourced, the oversight and management of these functions, particularly in jurisdictions like the UK, remain firmly the responsibility of the compliance officer.

Sign up for 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! 

Trust Payments Partners With Innovation in Payments and Remittances (IPR)

We’re thrilled to announce that Trust Payments, 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 Trust Payments, where they explain how to take your remittance business to new heights and unlock its full potential.

Unlocking Potential: How Collaborating With a PSD Agent Boosts Your Remittance Business

Remittance, the transfer of funds by foreign workers to their home countries, plays a critical role in the global economy. The World Bank reported that in 2022 alone, the money remittance business grew by an estimated 5% to $626 billion, making it a bigger financial inflow than foreign direct investment. 

And as the world turns increasingly digital, the online money remittance sector is anticipated to grow exponentially, thus reflecting the significant role it plays in global economies. However, operating a successful money remittance business comes with its fair share of challenges, including regulatory compliance, transaction costs, and building customer trust.

In this article, we will explore how collaborating with a PSD (Payment Services Directive) agent can significantly enhance your remittance business and how to leverage their expertise and expand your business reach.

Key challenges of remittance businesses

Despite its global importance, the remittance business grapples with several challenges. Regulatory compliance is at the forefront, as companies must adhere to a complex web of local and international regulations. These laws aim to combat illicit activities like money laundering, but complying with them can be costly and time-consuming.


Furthermore, high transaction costs, driven by fees for currency conversion, transfer processing, and other service charges, can deter potential users. Lastly, gaining customer trust is critical. The international remittance business involves moving people’s hard-earned money across borders, a process fraught with risk and anxiety for customers. Maintaining transactional security while offering a smooth user experience is thus vital to business remittance services.

What is a PSD agent?

The Payment Services Directive (PSD) is a European Union regulation that oversees payment services in the internal market. A PSD agent, authorised by the Financial Conduct Authority (FCA), is a business that provides financial services on behalf of another company under the PSD legal framework. 

PSD agents are under the authority of a licensed e-money or payment institution that is fully responsible for their actions.

Joining Forces for Collaboration & Business Growth

For remittance companies, collaborating with an FCA PSD agent can be a game-changer, providing distinct advantages. PSD agents are skilled navigators of the complex legal requirements, licenses, and anti-money laundering regulations. Their understanding of compliance minimises regulatory risks, freeing remittance companies to focus on their core operations.

Moreover, PSDs can help mitigate fraud and ensure transactional security. They employ sophisticated technologies and algorithms to detect unusual patterns and thwart potential fraudulent activities. Their expertise in this realm significantly bolsters the credibility of the remittance business, winning customer trust.

Here are three additional benefits businesses can gain from partnering with a PSD agent:

1. Increased technological capabilities

PSD agents bring to the table robust technological solutions. They provide secure, reliable payment platforms that integrate seamlessly with existing systems, utilising APIs for flexibility and interoperability. 

In addition, they offer data analytics capabilities, supplying crucial insights into customer behaviour and market trends. This valuable information can inform strategic decisions, supporting the growth and competitiveness of the remittance business.

2. Streamlined transaction monitoring, reporting, and customer support

Collaborating with a PSD agent brings efficiencies in transaction monitoring and reporting. They possess refined mechanisms for tracking and documenting transactions, ensuring all activities are compliant and traceable. Additionally, they offer comprehensive customer support services, enhancing the customer experience and fostering loyalty.

PSD agents have sophisticated systems for tracking transactions and generating comprehensive reports that comply with regulatory standards. 

They document every transaction in detail, ensuring traceability, and present this data in user-friendly, accessible formats. This organised, precise reporting enables remittance businesses to have clear oversight of their operations, which in turn helps them identify patterns, track growth, monitor compliance, and make data-driven decisions. 

3. A broader network

A partnership with a PSD agent can significantly expand the reach and network of your remittance business. With their international affiliations, PSD agents can help extend your services to new markets, augmenting your customer base. This geographical expansion boosts revenue potential and reinforces your standing in the global remittance arena.

How to Get Started with a PSD Agent

Collaborating with a PSD agent can significantly boost your remittance business by addressing the challenges faced in the industry, such as regulatory compliance, transaction costs, and customer trust. 

By leveraging a PSD agent’s expertise, technological capabilities, and network, you can navigate complex legal requirements, mitigate fraud, streamline operations, and expand your business reach. 

At Trust Payments, we have over 20 years of experience supporting financial services institutions with fast settlements and high approval rates. Our overnight settlement service makes remittances faster. We offer instant pay-in and pay-out functionality and a seamless payment experience for your customers.

If you’re ready to take your remittance business to new heights and unlock its full potential, we encourage you to contact our expert team today!

Video | Finding the Right Licence for Your Money Service Business

In the second instalment of our informative “How to Start Series,” Ibrahim takes a deep dive into the crucial topic of licences and their significance when establishing your very own money transfer business. Obtaining the suitable licence is significant, as it legitimises your venture, safeguards your customers, and builds trust within the market.

In this video, Ibrahim explains the various licences applicable to money transfer businesses, shedding light on their distinct features and requirements. Understanding the types of licences available is vital to ensuring a smooth and legally compliant operation in this industry.

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:

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.

  1. 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. 

  1. 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. 

  1. 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. 

  1. 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! 

RemitONE Winners of the Remtech Innovation Remittance Solution Award at GFRID | United Nations Summit in Kenya, Africa!

We are delighted to announce that RemitONE has secured the prestigious Innovation Remittance Solution Award at the RemTECH Awards 2023 – GFRID | United Nations Summit in Kenya. This incredible achievement underscores our commitment to revolutionising the payments and remittance industry through cutting-edge solutions.

The RemTECH Awards, organised by CrossTech and held as part of the GFRID | United Nations Summit in Kenya, served as a platform to honour remarkable achievements and advancements in the fintech industry. Over three days, industry professionals from around the globe congregated to celebrate and engage in an enlightening conference.

Our success in the Innovation Remittance Solution category can be attributed to the groundbreaking tools we have developed. Notably, our Multi-Online Remittance Manager™ and Multi-Mobile Remittance Manager™ have played a pivotal role in advancing financial inclusion. These game-changing solutions bridge the gap between the banked and unbanked populations, providing greater accessibility and convenience for money transfers through our digital innovations.

We had the privilege of being assessed by esteemed judges who acknowledged the significance of our innovation. Leon Isaacs, judge and CEO of DMA Global, presented us with the award and praised our approach. He emphasised, “RemitONE has seen a problem and looked at various solutions and put them together in a way that truly works for the people who use their services or could utilise their services, which I think is innovative in many ways.”

Representing RemitONE at the event, our Managing Director of Africa, Ababacar Seck, accepted the award and delivered an inspiring acceptance speech. He reiterated our commitment to empowering clients, including banks, money transfer operators (MTOs), startups, and central banks, with innovative solutions tailored to their specific needs.

This award serves as a testament to our relentless pursuit of innovation and excellence. At RemitONE, we remain dedicated to shaping the future of the payments and remittance industry and improving the lives of migrants and their families worldwide.

To learn more about our award-winning Money Transfer Software reach out to us at sales@remitone.com.

How to Start a Money Transfer Business: Collaboration and Key Partnerships

Authored by Ibrahim Muhammad, Senior Consultant at RemitONE

Ibrahim Muhammad is a highly passionate payments professional with over 20 years of experience in Money Transfers and provides specialized consultancy to start-ups and incumbents.

So far we have covered various topics as part of our ‘How to Start a Money Transfer Business series’, including information on the basics of getting started with a Money Service Business (MSB), followed by the licensing options available to new MSBs with a particular focus on the UK. We have also covered a critical area of managing AML and Compliance for MSBs. In this article, we are covering yet another important topic: creating and maintaining collaborations with key stakeholders and partners in order to establish and grow your MSB.

What Partnerships Will I Need?

Establishing and maintaining the correct type of partnership is at the core of any MSB, particularly those offering cross-border remittances. There are several types of partnerships that an MSB needs to consider, as specified below:

Banks

Depending on the business model, MSBs might need to maintain bank accounts both domestically and internationally to facilitate the secure collection of funds from their customers and enable the transfer of funds. For international transfer of funds, MSBs can establish relationships with banks in the receiving countries for the remitters to send funds to their beneficiaries, primarily in the form of credit to bank accounts.

Today, the majority of banks offer APIs wherein the MSBs can directly and securely facilitate the instant transfer of funds to the relevant beneficiary accounts. Banks play a significant role in the fund flow and are the heart of the entire payment ecosystem. MSBs can opt to establish a relationship with a single bank in each of the receiving countries in order to facilitate the transfer of funds either to the same bank account or any other third-party bank account within the same jurisdiction. MSBs need to maintain sufficient funds upfront with each of the banks they establish relationships with to ensure the timely processing of funds to the beneficiaries’ accounts.

Money Transfer Network Operators

For new MSBs, it might be quite challenging to establish a bank account easily, mainly due to de-risking factors as well as liquidity constraints. Therefore, a quicker route is to collaborate with an established Money Transfer Network Operator that can facilitate cross-border payments to a wider network.

The advantage MSBs can have by establishing relationships with such operators is that they will have a single hub to facilitate pay-outs to different countries. This solution also empowers their remitters to send funds instantly and securely to their beneficiaries in the form of credit to bank accounts, cash collection or even mobile wallets in the receiving countries (subject to business and regulatory arrangements in place).

Payment Networks

MSBs that accept payments via cards or bank transfers from their customers (remitters) need to also maintain relationships with payment gateways and payment acquirers. As the trend is moving more towards cashless payments, it is important that MSBs maintain this type of relationship with payment networks. The majority of payment gateway providers and acquirers offer several types of pay-in channels for the remitters of the MSBs, such as VISA, Mastercard, and Paypal, and even facilitate direct bank transfers on the sending side.

Mobile Money Network Operators

Mobile network operators can help MSBs to reach customers in remote or rural areas who may not have access to traditional banking services. MSBs can partner with relevant operators to offer mobile money services. Several players in Africa such as M-PESA in Kenya have been pioneers in offering these mobile money services.

Retail Networks

Retail shops and other types of outlets are also important partners in the remittance ecosystem. They usually collaborate with money transfer operators, mobile money network operators or banks to become cash-in our cash-out channels. MSBs can also consider establishing relationships with retail networks that have extensive physical brick-and-mortar branch presence in the receiving countries.

Key questions to consider

MSBs need to ensure that they consider a range of factors before partnering with any of the aforementioned entities. Below are some of the key questions that an MSB needs to consider for it to decide on the right partnership:

  • Does the partner fit into the business goals and model of the MSB?
  • Are they regulated/registered in the relevant markets?
  • Are they trustworthy, reputed, and transparent in pricing?
  • Do they offer competitive rates and commissions?
  • Will the partnership bring in more revenue, and increase the customer base of the MSB?

Overall, partnerships are a critical component for the growth and success of the MSBs. By partnering with the right entities, MSBs can expand their global reach, and improve their product types and services offered while also meeting the needs of their customers in various jurisdictions.

What next?

Thank you for taking the time to engage with our ‘How to Start a Money Transfer Business’ series – we hope you have found the content insightful!

If you’re looking to launch a Money Service Business or grow your existing business, RemitONE offers a comprehensive solution with our RemitONE Launchpad service. This bespoke service is designed to guide you through regulatory hurdles, support you with compliance requirements, and much more.

Our expert team will provide you with tailored advice on your unique requirements and objectives. We’re dedicated to helping you land, expand and flourish, and have a proven track record of successfully supporting all our clients at every stage of the process.

So, if you’re looking for a reliable and experienced partner to provide end-to-end support, please don’t hesitate to get in touch with us.

Tap into our experts and schedule a free consultation to get started.

Video: Saving the Crucial Role of Agents and Banks in the Remittance Industry

Brought to you by RemitONE, the Innovation in Payments and Remittances (IPR) Global Hybrid event took place on 19-20 October 2022 and included a series of fantastic discussions.

Wallets have been on the rise in recent years which has forced banks to embrace technological advancements to keep up with the pace of digital innovations in the remittance industry. In this panel, we uncover the driving forces behind this change and the possible impact it may have on banks, agents, and the overall money transfer landscape in the coming years.

Moderator:

  • Ababacar Seck, Managing Director – Africa, RemitONE

Our panellists include:

Why are pay-out transactions shifting to wallets? 

There’s been an increase in the popularity of pay-out transactions through wallets, due to their accessibility and simplicity. This upward trend is particularly prominent in Asia and Africa. For example, in Ghana, the mobile money market reached $121.8 Billion in 2022 and is expected to grow to $590.7 Billion by 2028. George believes the reason behind this is attributed to factors such as convenience, as wallets are more easily within reach than banks, and overall save time and effort.

Leon also reinforces, wallets are often preferable as they’re easy to use which means people don’t require additional assistance. Other drivers are, the senders have more options, people have become more digitally savvy and most notably, it’s cheaper. Another key benefit of wallets is their increased security due to tokenization, which is a unique identification number attached to any personal information such as account numbers.

However, it’s not the same in every region. Sharon shares that in Jamaica there’s only one institute that offers mobile wallets, but that could change very soon. The recent launch of CBDC can possibly encourage more institutions to embrace digital wallets.

How can banks and traditional agents cope in the digital era?

Leon states in many cases it’s rare for agents or banks to be solely a remittance business. While they may have their core purpose, they should adapt and diversify their services to progress ahead in the competitive market. Sharon suggests that banks can collaborate with more agents to offer their products and services and satisfy client needs, however, there need to be adequate technology capabilities in place for it to be a success.

Data shows that customers prefer the physical contact of agents as they instil trust and provide clear guidance when a problem occurs, as opposed to communicating with a bot. A study even found that 64% of customers commented that they could not solve a problem when using mobile apps to transfer money. Overall, agents play a crucial role in building customer trust and loyalty especially as a large proportion of transactions are still carried out in stores and not through digital means, which proves they still hold a strong position.

There are different considerations for the send and receiving end for agents. The pandemic did accelerate a surge in people adopting digital payments and transactions which resulted in a lesser need for people to visit agents, and it’s likely that this will continue. As for the pay-out side, there is potential for agents to educate customers as online accessibility varies in countries where people are still hesitant about online banking and money transfers – this creates a good chance for agents to bridge the gap by acting as the intermediaries between clients and digital payments. Customers already trust these agents, which makes it more probable for them to adopt changes with the agents’ help.

Leveraging technology is another technique agents can utilise to enhance efficiency and strengthen their role further. For instance, many people have formed personal relationships with agents but sometimes lack financial literacy. In such cases, agents can take advantage of innovations such as card readers to increase customer security and reinforce the trust clients have in them. This can solidify the bond between the agent and client as well.

MNOs are taking over transactions led by banks, is this healthy? What does this mean for the future of final inclusion?

There is no denying that competition drives innovation and MNOs gaining the lead has pressured banks to also step up their game to progress ahead. MNOs often educate the underbanked on how to use their products, an area where banks are lacking. There’s also greater flexibility with MNOs, as people can instantly access their digital funds from the comfort of their homes without the need for documentation and physical visits to the bank, helping them to save precious time.

MNOs particularly boast a good distribution of agents across both send and pay-out. However, their products excel in locations where there is a vast digital presence (although they still have a huge potential to increase penetration of financial services, which will continue to encourage financial inclusion). In locations where there is good digital infrastructure, the need for agents to pay out cash is also lessened, this creates a window of opportunity for them to diversify their products and services. One example is M-pesa in Africa, where digital wallets are the primary method of payment. As a result, customers rarely use physical cash, which suggests that people will only need to visit a branch for a specific need unrelated to money transfers or cash-outs.

The changing face of remittance clients requires a new approach, how can MTOs keep on top of the needs of clients and how will this affect the business model?

In contrast to the past, migrants are more skilled individuals and therefore less reliant on agents, demonstrating increased digital literacy. As a result, the power balance has shifted to the customers, with the internet providing easy access for them to quickly switch to other companies if they are unsatisfied with the service.

Clients also tend to focus more on convenience, such as banking being available everywhere at any time and more demand for receiving immediate results. This places a heavy burden on banks – they often have to increase their costs to expand their workforce and enhance their operations more robustly. However, with the increasing popularity of social media, email, live chat and phone, it becomes challenging for the banks to meet the demand – this can lead to dissatisfaction, complaints and negative reviews, overall damaging the brand’s reputation.

To minimise this problem, Sharon proposes a collaborative relationship between banks and agents, to exchange knowledge and expertise and gain a thorough understanding of the client’s needs. Leon explains that companies need to rethink their strategies to maintain a close connection with clients whilst keeping pace with their changing needs. However, a positive takeaway is that customers are benefiting from having their needs finally met and the industry continues to thrive.

Can technology help agents preserve their role?

Whilst technology can be costly, it can be a useful tool to streamline operations more effectively. One way is gathering accurate data in a more interactive way instead of relying on traditional surveys. Social media platforms like Twitter polls can help analyse consumer behaviour, identifying factors which motivate them to pick specific agents over others.

As the rapid surge of digitalisation continues, more businesses are having to adapt. At RemitONE, we play a pivotal role in helping banks shift to the online realm. Our software empowers agents to provide customers with user-friendly portals whilst providing an array of options for them to choose from, such as airtime top-ups, prepaid card services and more. By utilising our industry-leading software, you can increase your transaction rates whilst maintaining top-notch security through our AML and KYC checks. This results in a seamless process from send to pay-out. You can also gain access to our global network of clients and partners that we have built over decades for you to access right away, saving you time, cost and headache. 

Interested in powering up your business? Get in touch with our experts to provide your customers with a secure, convenient, and exceptional money-transfer experience.

Tap into our experts and schedule a free consultation.

References

https://www.imarcgroup.com/ghana-mobile-money-market

https://www.westernunion.com/blog/en/leery-of-how-digital-wallets-work-let-us-break-it-down-for-you/

https://thefinancialbrand.com/news/digital-banking/mobile-banking-trends/what-consumers-actually-want-from-their-banks-mobile-app-120754/