Over the past two years, we’ve witnessed a shift within remittances and the wider money transfer industry that has seen companies increasingly look beyond growing their direct customer base. The leading consumer players are increasingly leveraging their offerings as B2B or platform plays.
Platform plays are attractive as they remove the burden of direct customer acquisition and seek to monetise payment capabilities that have been built up over time. There are also the obvious financial benefits of additional revenue, as well as the potential valuation upside.
Some of the decisions are not straight forward, though. How close a competitor will you offer your platform to? Euronet, owner of Ria and XE, has allowed direct competitors such as Remitly and Xoom to leverage its payout network. Western Union, on the other hand, has continually taken the position that it will not support a direct competitor in the money transfer space, instead seeking partners such as those in big tech, banking and fintech.
Paths have also been different. Nium started life as remittance player InstaReM, but InstaReM is now very much a minority part of the business as it looks to grow in travel and as a payout network. Others have moved away from the consumer space entirely, such as Santander’s digital payments company PagoNxt, which is dropping its consumer money transfers platform PagoFX in order to better focus on its B2B arm as it works towards a goal of €2bn annual revenue. Uniteller, owned by Mexico’s Banorte, is a distribution partner to many players in the space but also has its own direct to consumer brand uLink.
Differentiating a payments distribution platform is going to be the next challenge. More and more companies are building up the capability to offer these services whilst at the same time partnering behind the scenes with each other to fill gaps of in-house capability.