As the world’s sixth largest receive country in terms of total remittance flows, and the fifth in terms of population, Pakistan is a key country in the global remittance landscape. But how does its remittance market differ from elsewhere? I caught up with Rashid Ashraf, CEO of ACE Money Transfer, a key player in the Pakistan corridor, to find out.
ACE Money Transfer began life as an exchange company in Pakistan in 1992, but expanded to remittances from 2002, starting with the UK to Pakistan corridor. It now provides remittance services from over 20 sending countries to 100+ receiving countries, although Pakistan remains its biggest corridor. At the start of 2021, the company shifted to 100% digital pay-in, making it an interesting case study for pandemic-triggered digitisation.
In our conversation, Rashid provided some insights into the changing Pakistan remittance landscape:
- The country has undergone considerable regulatory change. From 2009 the State Bank of Pakistan established the Pakistan Remittance Initiative to combat illegal activity in the market, reducing costs and increasing transfer speeds. Rashid says this has led to the establishment of pay-out locations across the country, including in rural areas, meaning migrants in the UK and Europe can send money to recipients in their hometowns “very easily, conveniently and quickly”.
- The typical customer profile of someone sending money to Pakistan is migrants sending money home to support their families with bills and other regular household expenses. However, while cash remains key for some customers, it has reduced significantly on the receive side, with ACE Money Transfer now paying 55% of remittances to Pakistan as account deposits.
- On the send side, cash has vanished completely. This trend began following 9/11 when there was a crackdown in sending cash to Pakistan, but has been exacerbated by the rapid digitisation in Europe, with even traditionally cashed-based jobs such as taxi driving and takeaway delivery going online. While in 2018 15% of ACE’s pay-ins were cash, it stopped taking cash all together at the end of 2020, and customers now send money via an app.
Rashid also provided some insights into how ACE is positioning itself:
- The removal of cash has helped pricing, with Rashid saying that the removal of overheads relating to the cash business has helped combat the wider pricing pressure felt by the industry.
- Rashid says the company has differentiated itself during this period of change by creating an app where the customer feels like they are “entering a physical shop”, with personal touches such as notifications alongside multilingual support.
- ACE Money Transfer’s biggest send market is the UK, but it also has strong markets in Italy, France, Spain, the Netherlands and Scandinavia – all areas with high numbers of Pakistani diaspora – and also most recently launched in Canada. The company also has significant business sending to countries in Africa, such as Nigeria and Senegal, as well as Bangladesh and the Philippines.
- The company is also launching a multicurrency card with Mastercard in the UK, which will be designed for customers to use when they travel abroad.
- Looking to the future, the company plans to expand more globally, into markets such as the US, Hong Kong, Malaysia and Turkey, as well as increase its marketing to attract a more global customer base.