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Intermex results show the importance of retail

Intermex reported its 2020 results earlier this month. Revenue for the year rose by 12%, bringing the company’s market share in its key corridors – US outbound to Mexico, Guatemala, Honduras and El Salvador – to over 19%. 

We spoke to Intermex’s CEO Robert (Bob) Lisy and CFO Andras Bende to understand what drove this growth and the strategy for 2021 and beyond.

Our key takeaways:

  • Intermex has grown its retail cash business as others have turned to digital
    Whilst most of the market has seen retail decline, Intermex has grown the segment and currently has only a minimal digital footprint. Its core customer base of agricultural and essential workers from Mexico and Central America have not shown the appetite for digital that so many other workers have. 
     
  • Digital will increase, but not as a trade-off for its higher margin retail business
    Intermex has been investing in building a digital proposition but has no plans to go after what it calls the millions of expensive digital customers who have acquisition costs of between $50-100 each. Its network of approximately 7,500 agents continues to be the preferred choice of Intermex’s 4 million active customers. 

    It’s interesting to note that the number of overall wires deposited directly into bank accounts increased 50% in 2020, and it now represents 20% of overall wires.
     
  • Where the future growth lies
    I asked Bob how he could double or triple the business. First, he sees a lot of opportunity regionally in the US. Whereas Intermex’s market share is strong in some states, he still sees a lot of opportunity in the western US States as well as adding Canadian outbound and more African payout markets. Plus, Intermex is investing in digital but it will do so carefully so as not to reduce its EBITDA margins and also not to upset its relationships with its retail agents, who form the core the business.

How does Intermex price versus the competition?

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