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

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: Better Together – Building a New Global Standard for the Remittance Ecosystem

Continuing our recent discussions exploring the challenges being faced by the remittance sector in the wake of the COVID-19 pandemic, RemitONE hosted a webinar on the 23rd of June 2021. The 90-minute conversation centred around the concept that in order to “build back better” after the pandemic, the money transfer sector needs to work together to create a new global standard. The panel was made up of experts from both RemitONE and our friends and partners in other global companies. In case you missed the webinar, here is a summary of the key insights.

Webinar moderator:

• Oussama Kseibati, RemitONE

Panellists:

• Hugo Cuevas-Mohr, CEO at Mohr World Consulting
• Sidharth Gautam, Head of Sales at AZA Finance

How significant is the remittance industry and who are the traditional and new players in the remittance ecosystem?”

Hugo Cuevas-Mohr: I’ll begin by defining what remittances actually are. The term remittance implies a family member sending money to other family members, for example. Remittances for the world bank, meanwhile, are only considered “worker remittances”, so the money transferred between family members is around 650 to 700 billion dollars per year of recorded remittances. On the world trading stage, of course, this number would not be extremely significant, but it is important to understand that this is higher than the investment from one country to another. It is also much higher than the aid that developing countries receive, so the significance is relative to different countries. In terms of significance, it varies depending on the development of the country. By comparing the remittance figure to GDP you can see that some countries are at 30% to 35% of their GDP, which is the case in Nepal and Haiti, for example. Interestingly, by contrast, big countries such as China and India will undoubtedly have high volume, however, there is less significance as the GDP is low. Another comparison is the population: if you divide remittances by the population of the country, then you can determine the significance of the remittance ecosystem based on each average individual in that country. Using this logic, Lebanon is number 1 in terms of significance, as it is a small country with a small population and a huge amount of money every year. This same principle can be applied to towns as well.

Sidharth Gautam: I completely agree with Hugo. In fact, in a few south sub-Saharan countries, remittance is essentially their backbone. There is a word developed by the World Bank called LMIC: “Low and Medium Income Countries.” Remittance is incredibly important for LMICs. Their entire country arguably depends on them.

Hugo Cuevas-Mohr: Adding to that point, remember that money goes to the lower fourth or the lower fifth of the economy. Remittances are also an important backbone for poor families in LMICs, therefore they are a really important “backbone” for them. Regardless of how those poor families spend the money, it doesn’t change the fact that they depend on remittances to survive. Indeed, sometimes 60 to 70% of a poor family’s income is primarily derived from remittances.

Who are the traditional and new players within that ecosystem, focusing on the traditional versus new and formal versus informal?

Hugo Cuevas-Mohr: It depends on a few things. In remittances, there’s always a sending market and a paying market. With regards to the pandemic, there was a small decrease in certain countries, particularly if they depended on Europe. However, if they depended on the United States you actually saw an increase, which was completely unexpected. The traditional sending players have always been agent-based, so brick and mortar operations were affected negatively in the early part of the pandemic as people couldn’t visit those agencies. As a result, every new digital player saw an increase. The more digital the payment; the higher the remittances would be, for example in Africa, mobile money companies saw an increase in sales during the pandemic due to the fact that remittances landed in mobile wallets. So we have seen transformation, however, I think it is too early to tell what will change and what will stay the same as traditional companies are evolving.

Oussama Kseibati: In the past, in traditional Asian markets cash has always been king. But over the past 10 years we have seen innovation being brought into the market and a move towards digital that has been hastened by the pandemic. I think as we get to the second and third generations that are more innately familiar with new technology, things are only going to get better.

How do you think we can enhance payments through successful partnerships and working together?

Sidharth Gautam: Partnerships are absolutely critical. No one organisation can facilitate change by itself; it has to be a concerted effort. We all have our core competencies, so the best practice should be to focus on these competencies and then align with partners who have a laser sharp focus in another  particular area. AZA Finance is a firm believer in that, and our partnership with RemitONE is proof. It’s a natural combination of one plus one rather than automatic progression. That way you can start to create an ecosystem of consumers, brick and mortar agents, digital companies, aggregators (AZA) and technology, providers like RemitONE. All of these players have come together to give a seamless, end-to-end experience to the consumer. There is no point in reinventing the wheel but we have to drive meaningful and coordinated change at a global level over a sustained period of time to make it happen.

Hugo Cuevas-Mohr: Sidharth is right on the money. It maybe even as recently as a year and a half ago, partnerships in this space weren’t really stories but it’s booming now. You have to understand that traditional companies did everything on their own and always built their own systems, distribution, networks and compliance. But that’s the old way of doing things and for some companies, it can be difficult to break the habit. There are so many legacy remittance systems right now, and sometimes it might be best to just scrub the old system entirely, salt the earth and start with something fresh. Realise what you’re good at – the thing that makes you different, and work with partners to fill in the gaps. Also, remittance is one financial service and there are many other financial services the same customers need, so you have to integrate those services. Unless you want to do all of that yourself, which becomes rather complicated, it’s always better to partner with a company that has the right knowledge and resources. The new breed of digital banks are all being built on that more modular way of thinking.

How does one foster a good working partnership?

Hugo Cuevas-Mohr: In our industry, the important partnerships that we have is with the banking sector and sometimes we forget that. It’s been hard in some markets to build good banking relationships and now you’ve also got cryptocurrency and the new wave of digital banks to deal with too. You need to create that banking partnership to provide that flow of funds in the collecting and disbursement sites and if you are cross-border you’re also dealing with foreign exchange, so you need to be able to be very good at managing currencies. How that partnership is able to exist and survive is all about transparency; sitting down and being honest with each other – what you need, what you’re willing to provide and how that partnership is going to be organised.

Sidharth Gautam: We are the biggest non-bank currency provider in Africa and apart from Southeast Asia, Africa is one of the biggest remittance receiving markets in the world. So we get a lot of requests from small and medium-sized MTOs that want to expand into Africa but lack the knowledge and the data to do so. They don’t have those resources like the big larger MTOs where they can hire a market research team and that is where the partnership comes into play. So, not only do we give them an aggregator and last-mile liquidity but we also help them with Google Analytics, for example. I feel like marketing is where you explore the unexplored and it takes a partnership to the next level. That’s where long-term relationships get forged.

How can you sort a good partnership from a bad one?

Sidharth Gautam: It is very clear to me what my core competencies are and where I can leverage somebody else’s competency. It’s both a mix and a marriage between two equals and it has to be built on a common remittance platform for everybody. There are always going to be challenges. We are a regulated industry so you can’t just partner with anybody. You need to be very clear as to whether or not your partner is certified and that is the basis of any partnership in our business. Remittance is a very fragmented industry – the top three players have major market shares and yet every day you see new players coming up, primarily in the digital space where you can launch in the space of a few months. So there are lots of little guys scrambling for attention that might not be on the same page as you from a regulatory perspective. So do your research. What you also need to see is how potentially scalable that partnership is. For a successful partnership, it is important to understand not only your core competencies but what you want to achieve by having that partner on board and where you want to end up.

Oussama Kseibati: I agree. In fact, I’ve known companies in the past that have chosen certain providers they want to grow their business with but because they’ve used a certain tech provider it’s very hard for them to now uproot their whole business and take clients over to a system that they can scale. Again they’ve gone with someone who’s slightly smaller or built their own system and it causes more headaches further on down the line.

Hugo Cuevas-Mohr: Partnerships sometimes don’t work. And that’s fine. Sometimes I speak with companies and I have to be quite philosophical about it and say that sometimes it works and sometimes it doesn’t and you can’t really put a finger on why. Also, companies change and you have to be flexible to see where the market, takes you. Maybe you need to get rid of a partnership because you’re going in a different direction? So flexibility is something that you must have in this market. The pandemic has arguably made it even harder for everyone to plan for the long term, so you need flexibility about how you set up your structure. Flexibility is part of the game in everything we do these days. Even as people we need to be flexible enough to adjust to new ideas and new possibilities.

What are the developing trends in our ecosystem and what is RaaS?

Hugo Cuevas-Mohr: Remittance as a Service (RaaS) is so interesting because it has been such a long time coming. It is essentially an all-in-one solution that allows companies to launch money transfer software services from any particular geographic location. How does it work? Let’s say you have a good brand in Southeast Asia or in Africa and you want to do business in the UK. Maybe you can put your own brand in a product like an app or a mobile wallet and it is your image but using a third-party service. That’s the deal –  I give you my brand and we do a partnership together, all those remittances come to me but to my client in the UK or in Europe, it’s the brand they’re interacting with. You’re behind the scenes. It’s really going to change the market. What all regulators want is better service and lower cost; a more compliant remittance system and this could definitely give them that.

How can remittance fix the gig economy, and how should we participate?

Sidharth Gautam: That is my favourite question so far! We are all are so used to hearing this word, “gig economy,” but what actually is it? Let’s talk stats. As of 2020, 1 in 10 people in the UK is employed by this “gig economy,” the equivalent figure in the US is around 8%. By 2024, one in four people, which is 40% of the workforce, will be in the gig economy and how can remittance solve the problem? Let me give you a real use case: An Uber driver in the UK gets paid directly into their bank account, which is fine, of course. Now, let’s shift this problem to Africa, or Tonga or some other nondescript, sub-Saharan country where almost one-third of the population doesn’t have a bank account. How do these Uber drivers get paid? That is where this whole idea of mobile money and digital wallets comes into play. That’s what the gig economy is doing and up until now either these people are getting left out or the  bank charges are not transparent and it takes ages for these guys to get paid. In the US and the UK, you do a transfer today from the UK and it’s in the US account the next day. But for Africa, it can take a week. I mean, it depends on the intermediary bank that might have its own checks charges but also, in certain parts of Africa there is one soft currency for seven countries and the banks of those seven countries don’t talk with each other. That is where organisations like ours play such an important role in the gig economy, helping these people get the money, faster and quicker because that’s the way forward.

For more information or to request a free consultation with one of our money transfer specialists, please email marketing@remitone.com

RemitONE integrates with payment gateway Vyne

RemitONE, the leading global, technology and business services firm for the remittance world, today announces its integration with Vyne, the specialist account-to-account payments platform. 

The deal gives RemitONE’s 100+ remittance clients instant access to Vyne’s payment solution, becoming the fastest, most cost-effective way for their customers including Payment Institutions (PIs) and Money Service Businesses (MSBs) to send remittances globally. 

Vyne uses Open Banking to move money in real-time between bank accounts, bypassing long-established but now outdated card networks and their associated fees. Vyne’s single integration means RemitONE’s clients can access the benefits of Open Banking including more secure, cost-effective, faster payments. With transaction times cut from days to seconds, RemitONE’s clients’ customers can send money abroad quicker than ever. 

Because Vyne allows customers to make payments directly from their own verified bank account, “know your customer” (KYC) checks and “Secure Customer Authentication” (SCA) fraud authentication can be carried out quickly and seamlessly, reducing friction and vastly improving the customer experience. 

Aamer Abedi, Chief Marketing Officer at RemitONE, says: “RemitONE is always seeking the most innovative payment products for our clients. The technical ease of Vyne’s payments platform allows MSBs to get up and running quickly, and offer their customers an efficient, robust and cost-effective way to transfer money. 10% of our MSBs took the first steps to integrate with Vyne within two weeks of the integration going live, with more client MSBs wanting to take advantage of Vyne’s Open Banking Solution every day.” 

Karl MacGregor, CEO at Vyne, says: “The international money transfer market is booming. Globalisation and the rise in digitalisation means there’s an increasing need to send money abroad as quickly, easily, and cost-effectively as possible. This integration combines the power of RemitONE’s renowned money transfer solution and global network, with the easy integration, instant settlement, and fraud resilience of Vyne’s payments platform. Together we are opening access to a new way to pay, allowing remittance businesses to offer the significant competitive advantage of safer transfers and more seamless customer experiences.” 

Take advantage of the RemitONE and Vyne 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. For more information on RemitONE, please email marketing@remitone.com

RemitONE – AZA Partnership to Provide an End-to-End Money Transfer Solution

RemitONE, the leading provider of money transfer software solutions, announces its partnership with AZA, Africa’s largest non-bank currency broker.

This symbiotic partnership is a compelling proposition for money transfer operators sending money to Africa. Customers can now benefit from both RemitONE’s multi-channel money transfer platform and the ability to send money, airtime, bank transfers, and mobile transfers to Africa through AZA’s payout network.

AZA is a fully regulated Authorised payment institution by the FCA for the UK & Bank of Spain for Europe that specializes in both P2P & B2B last-mile payouts through its API solution across eight regions namely Nigeria, Ghana, Senegal, Uganda, Morocco, South Africa, UK and SEPA Region. It has immediate plans to expand to Côte d’Ivoire, Mali, Togo, Cameroon, DRC & Egypt within this year. AZA currently works with top-tier MTOs including Western Union, World Remit, Azimo, IDT (Boss Revolution), and is excited to add RemitONE to their list of partners.

“Our partnership with RemitONE takes us one step closer to simplifying cross-border payments in frontier markets,” says AZA CEO Elizabeth Rossiello. “Being a market maker, our focus has always been to offer the most competitive pricing to our customers and we are looking forward to serving more customers globally in partnership with RemitONE.”

RemitONE customers who are looking to take advantage of AZA’s competitive rates and payout network can easily integrate with AZA’s plug-and-play solution and gain access to these benefits immediately.

“We are very excited about this partnership, RemitONE and AZA are aligned on the core value of using technology to empower remittance and our aim to make it easy and cost-effective for people to send money home,” says RemitONE CEO Anwar H Saleem. “Our services complement each other and our partnership will ensure that we deliver a rich customer experience.”

Customers can benefit from both RemitONE’s highly successful and compliant money transfer platform as well as the ability to send money, airtime, banks transfer, and mobile transfers to Africa through AZA’s vast payout network.

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

About AZA

AZA is an established provider of currency trading solutions that accelerate global access to frontier markets through an innovative infrastructure. By leveraging cutting-edge technology in their flagship products, TransferZero and BFX, they are able to significantly lower the cost and increase the speed of business payments to and from frontier markets. TransferZero is their B2B2C product, which provides both wholesale currency purchase and retail settlement via their robust API. BFX is their B2B over-the-counter platform for businesses with wholesale currency needs, especially those paying partners and suppliers. Their partners utilize AZA’s hybrid financial infrastructure and deep local knowledge to manage liquidity and send payments to dozens of bank networks and mobile money operators across Africa. They are licensed by the UK’s FCA and the Bank of Spain. For more information, visit:  www.azafinance.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. For more information on RemitONE, please email marketing@remitone.com

The Future of Remittance – The trends and strategies that will shape 2021

The World Bank predicted that global remittances would decline by 20% as a direct result of the COVID-19 pandemic in 2020. It remains to be seen if there is any truth to that shocking figure but one thing is for sure – the sector suffered in 2020 and continues to do so in 2021. The question is, are we already on the road to recovery? And if not, how do we get there?

We spoke to three of our clients and partners from three different regions to gather their thoughts and gain some global insight on what lies ahead for the money transfer industry in 2021 – Hugo Cuevas-Mohr, President & CEO of Mohr World Consulting, Walter D’Cruz, CEO of Moneo Solutions and Nadeem Qureshi, CTO at USI Money. Our very own associate sales director Oussama Kseibati quizzed these thought leaders on the key strategies, the technological innovations that might start to emerge and how traditional agent-based MTOs should be reacting to them.

A year of recovery

Oussama began the discussion by reminiscing on how 2020 was a year that necessitated a wider move to digital finance for the entire financial sector: “For remittance, this meant an increase in the use of digital solutions for cross-border payments.” This included a shift to a surprising number of traditionally cash-based agents using digital means to serve clients, with around 60% of domestic and international cash transfers taking place online.

So the stage has already been set. But according to Hugo, if 2020 was a year of forced change then 2021 is going to be a year of resilience and leaning into the challenges posed by anomalies such as COVID-19 and Brexit. From where he stands, the remittance sector has already proved itself to be a resilient force. Indeed for Hugo and Mohr specifically it has been a very challenging time. Their target market is Filipinos sending money home and many Filipinos working in the UK have seen their incomes reduce or disappear completely in the last 12 months as they tend to work in medical and home care sectors.

He explains: “The era of COVID-19 is an uncertain one and that uncertainty is one of the main issues for the global remittance industry, especially when trying to predict recovery. However, despite the issues, the money transfer industry has seen a lot of recovery and migrant communities are continuing to send money to their families, regardless of changes in their own employment situation.”

Nadeem agrees and asserts that: “Despite the decline last year, the money transfer industry is a resilient one and is a sector which will certainly improve a lot faster than many others.” They also both agree that while they feel recovery is indeed already on the cards, we’ll need to wait until we see the data before we draw any solid conclusions.

Strategies for success

Of course, while the sector might be incredibly resilient, it is also far from bulletproof. This means there are going to need to be some solid strategies to help traditional agents-based actors adapt to the digital push of 2020. The primary trend from which all other trends seem to emerge is a mass migration into the digital realm. This will be particularly relevant for small-medium MTOs, as they will have the flexibility to push further into digital solutions as the industry continues its recovery.

For Nadeem, however, he feels it’s the medium-large institutions that will be leading the way. He explains: “Many of these larger MSBs will be down-streaming activities, hoping for increased access to expanding pay-out networks and other digital solutions, such as e-wallets. As the industry recovers and the needs of larger business begin to grow again, the MSBs will also be looking for new ways to grow too, and this will heavily centre on the digital push.”

Oussama then turns the focus onto blockchain and cryptocurrency, stating: “As a direct result of the pandemic some currencies are going to be more volatile and people could seek safe havens in cryptocurrency, which is something many banks are already doing.”

Walter agrees on this increase in blockchain adoption, which is being fuelled by the mainstream capital markets. He adds: “The popularity and interest surrounding blockchain has been growing for several years now but in 2020 we had begun to see it really explode. As well as the obvious focus on cryptocurrency such as bitcoin, blockchain is also being used by enterprise governments and financial institutions to assist with seamlessly managing the exchange of value.” 

Hugo, meanwhile, believes that there will be increased pressure on MTOs for transparency when it comes to fees and FX rates and that blockchain will definitely help with this. And with major names such as JP Morgan already throwing their hats into the ring, blockchain could very well end up being the major player that catalyses recovery as we move deeper into 2021. He also feels that we’ll be seeing more companies working internally to lower costs and more partnerships and integrations by year’s end.

Derisking and the challenger bank solution

According to Hugo, 2020 was the year of the digital tsunami and 2021 is going to be the year of the blockchain and cryptocurrency tsunami and he feels this is going to have a major impact on derisking, which is worse in some countries than in others but is still a global problem. He does also believe, however, that challenger banks might be the solution as long as they are properly integrated with fintech.

He says: “The position of banks as integrators of other services might be making it easier for other banks. This industry has to rely on these partnerships between the new banks and the fintechs and allow them to create solutions together. COVID has certainly pushed that forward, which I guess you could say is something of a silver lining.”

Above all, however, he believes that it’s creativity that is pushing the industry forward and he is inspired by all of the new players doing the groundwork in that regard. Indeed, he feels that’s where the potential for blockchain comes in. 

Oussama asks whether there are “solutions out there with companies acting as an aggregator to open up space as a quicker route to market for smaller MTOs and whether or not the big banks will change their attitude towards MTOs accordingly.” He adds: “With HSBC being fined £1.2 billion as a result of derisking recently, it’s unlikely the larger banks are going to shift their viewpoint but challenger banks are coming through to fill that space.”

According to Walter: “The reason they won’t support MTOs is that you’re not only essentially taking their business away by cutting into a piece of their pie but in their eyes, the risk involved is greater than the value that MTO might bring to the table and that’s all down to the fact there’s a lack of transparency between the bank’s compliance and the MTO.”

For Nadeem, meanwhile, he can see major bank attitudes towards derisking getting worse as the cost and the risk in terms of the fines is just too great compared to the benefits. However, he believes the challenger banks might offer a solution here. He explains: “The challenger banks entering the market are not necessarily going to solve the problem but the smaller MTOs looking for partners are going to have a much better chance at finding partnerships with these challengers than their larger counterparts.”

Then, of course, there is the impact of Brexit to unpack and digest. Generally speaking, our talking heads concluded that there is no need for MTOs to panic as long as they can learn to adapt. There are certainly going to be losses for any MTO based in the UK or Europe that deals with those markets, but London will remain a major financial centre and the centre must hold. For more on their thoughts, you can read our full piece on what Brexit means for the remittance sector – https://www.remitone.com/brexit-is-a-done-deal-but-what-does-that-mean-for-the-remittance-sector/

Will 2021 be the year of innovation or survival?

Walter feels 2021 is going to be more about simply “getting through it” than anything else, but that doesn’t mean he’s without hope. He explains: “I don’t necessarily think this year will initially be about the deployment of new technology. A lot of businesses are still recovering from the fallout of the pandemic so they don’t necessarily have the resources available to do a complete revamp.”

The improvements, he feels will be in an “explosion of partnerships,” because fintechs don’t have the resources to do everything alone, whether that’s compliance, risk or customer service. So they will need the help of both larger partners and the ‘little guys’, such as MTOs. He continues: “More connections and lower costs are going to be the case, broadly speaking for 2021 and it’s concepts like the RemitONE ecosystem that are going to help add value across the whole chain.”

Hugo agrees that 2021 is going to be a year of partnerships and collaboration and a shift in mentality across the board. He argues that MSBs should “forget about doing everything themselves. Everything will be almost modular because, particularly for the smaller companies, somebody else will be able to do one specific thing better and cheaper than you can.” Right now it would appear that we’re living in a world of APIs and developments that are great for small companies which can lower their costs and gain access to these solutions, whether that’s blockchain or something we haven’t even seen yet.

Nadeem, meanwhile, speaks of an e-digital compliance evolution: “When you have a sector with a large amount of competition it’s always going to be about who can provide the best user journey. Digital footprints are starting to grow and Fintechs are challenging regulators and pushing them to improve things, whether that’s through something as advanced as iris scanning technology or as simple as syncing their platform with social media to onboard customers more efficiently.” 

As Oussama sums up: “It’s going to be a year of smaller MTOs challenging the way things are being executed from a more modular approach through blockchain or other methods and we will continue to see this evolution going into 2022 and beyond.”

A beacon of hope

Throughout the talk, our experts also touched on several other more specific topics regarding the regulatory uncertainties in the Nigerian market to the general emerging markets in the African continent and the cost of acquiring new customers. To see the whole discussion for yourself, you can do so right here.

But the session ended on a resolutely positive note. Our experts spoke of advice for start-up money remittance businesses with no prior experience of the business and suggested that it was still a sector ripe with potential as long as these aspirant start-ups were willing to learn, read, research and understand the market. 

They also reiterated what appeared to be the crux of the discussion – that all the different strands of the financial sector need to start working together and forging deeper connections if they hope to succeed and thrive in 2021. That will lead to greater transparency, lower costs and more innovation and RemitONE’s deep ecosystem and malleable compliance network is the perfect middleman to help build and maintain those connections.

For more information or to speak to one of our experts please email marketing@remitone.com