Over our years of research at FXC Intelligence, we have seen many trends emerge in the international payments space. Some trends vanished quickly, while others seem here to stay. It’s fair to say – we have witnessed a variety of changes in the space.
In addition to our own research, our interviews with a range of CEOs in the international payments industry have also tipped us off on some changes to keep an eye out for.
Below, we list of some of the biggest trends we have observed and expect to see for the remainder of 2017.
Security Is and Will be of Increased Importance
As mobile money transfer transitions from a novelty to a financial necessity, security will become of increased importance. While transferring money across borders has never been easier, it’s also never been easier for someone’s identity to be stolen. Currently, many international payment products that are used online or via mobile technology require users to register and verify their bank account prior to making any transactions, we can expect to see this changing in the future. Technology is beginning to find ways to more easily identify users and the international payments industry will quickly adopt these technologies to attract more users and stay competitive in the saturated space.
In an interview with Jonathan Quin, CEO of World First, earlier this year, Jonathan pointed out that it is only a matter of time before mobile apps will be able to identify users based upon retina scans and fingerprints. This technological advancement will not only make international payments easier for users, but it will also help facilitate faster payments, as much of what drags out the money transfer process is regulation requirements surrounding proper identification and KYC compliance.
Along with easier identification of customers, faster transfers are beginning to pick up, and will continue to trend in the industry. Companies such as Abra or Circle utilize bitcoin and blockchain in order to facilitate small international payments almost instantaneously. We expect to see the market move more toward rapid payments in the coming months. In fact, just this week PayPal announced that they are working toward rapid cash payments, though it will probably still be some time before we see this trend take off – regulations still have time to catch up to the new technology.
More AML Investigations
The international payments industry has now been popular for long enough that it is likely attracting more federal investigations. Western Union was fined at the end of last year for Anti-Money Laundering, and we expect they will not be the last company to be fined. In fact, some companies were subpoenaed at the beginning of the year, including PayPal. This trend might not be as fun as faster transfers or mobile payments at the grocery store – but it will be a very real result of the growing international money transfer industry.
As we discussed with Mike Massaro of Flywire, we expect to see more payments companies merge or become acquired in the near future. Ant Financial is set to purchase Moneygram, and other companies are setting their sights on joining the international payments industry. With the large variety of options available to the average consumer for making international payments, it is only a matter of time before similar companies join forces, or risk disappearing all together.
More Vendors Accepting Mobile Payments
When you were last at Starbucks, did you notice that you had the option to pay with ApplePay? Maybe not (or maybe you paid with ApplePay) but in the near future, we anticipate that paying with a mobile wallet will be an option at many different stores. We are seeing this trend beginning to take over in the remittane market as well.
A good example of this trend is the company BillMo, who has developed a mobile wallet for remittance recipients in Mexico. Those who receive payments via BillMo can use the application to pay at a variety of vendors throughout Mexico. Recipients of financial assistance in other countries will not be the only people using mobile payments more often. Expect to see more stores in the United States and the United Kingdom accepting mobile payments, particularly as more users begin to download these apps and use them regularly.