search.noResults

search.searching

note.createNoteMessage

search.noResults

search.searching

orderForm.title

orderForm.productCode
orderForm.description
orderForm.quantity
orderForm.itemPrice
orderForm.price
orderForm.totalPrice
orderForm.deliveryDetails.billingAddress
orderForm.deliveryDetails.deliveryAddress
orderForm.noItems
IBS Journal March 2018


21


best rates are in the Middle East where a lot of Asian immigrants want to send money home from countries like the UAE,” Giriyan says. “They’re already below the 5% agreed by the G8 countries and in some places below the 3% agreed by the UN.” However, there are still pockets in some regions, like Africa, where fees can rise above 10% of transaction value.


These values remain high due to a lack of competition and the existence of exclusivity contracts, adds Giriyan. “There are regulators who will not take action against companies practicing exclusivity,” he says. “The process has now been very slow in bringing the values down.” Is competition more of a problem than infrastructure or country-by-country policy?


“In any market, when you add competition the prices will drop,” he says. “It’s the same with the remittance industry. There are some pioneers, who when they entered the industry could charge any fees they wanted.” He points to an example from the Middle East: when one of these old companies first entered the market in 1994, it was charging $20 for every $100 sent between the UAE and India. “It’s the fourth-largest corridor in the world,” he says. “Now the competition is there, and the price per $100 has gone down by a quarter.”


What would be an acceptable level, globally, for the industry? Obviously, customers would like it as low as possible, but where can a balance be struck between profitability and service? “Around 5% globally would create a good balance,” says Giriyan. “There are about 16,000 corridors in the world, and there will always be some that are more expensive than others. You can’t help it, unfortunately. Now we’re talking about a target of 3% by 2030, which is a little too ambitious right now, but perhaps we can reach that figure in the future.”


Adopting technology


Remittances is an industry that has embraced the mobility and agency which digital banking services and channels have opened up. So what lessons can traditional players learn from firms in the remittances space? Giriyan believes that his own industry still has some way to go when adopting new technology. “We’re not seeing as much technology adaptation as we would like in some areas,” he says. “In remittances there is always a ‘send’ and a ‘receive’. On the receive side of the business, innovation has really taken off, especially in Africa. You need only look at examples such as M-Pesa in Kenya. That technology kicked off in 2007.


“There’s a very poor banking penetration in Kenya. The need for useable domestic transfers resulted in the creation of M-Pesa and


add competition the prices will drop. It’s the same with the remittance industry


“ In any market when you


The world is always changing and will be a different place in a few years’ time. You have to be ahead of the game





the volume of transactions it deals with today is unbelievable. It’s a huge ecosystem.” M-Pesa’s success meant that copies cropped up in countries like Tanzania, Uganda and Nigeria. So does Giriyan think remittances still have a role to play in this digital revolution, or will banks step up to challenge the industry?


“As long as there are migrants there will be remittances,” he says. “Mexicans will continue to go to the US, and will continue to need to support their families. I, for example, am an Indian living in Dubai and I send money – it’s part of my long-term plans. People also like to put investment back into their home countries, into property, buy stocks and so on. In 2007 remittances were at a level around $400 billion. In 2017 it’s nearing $600 billion. That goes to show that remittances have sustained growth and will continue to show sustained growth.”


Banks just aren’t prominent in the sector, he adds. They’re unable to offer remittances at a cost competitive enough to match. “You check any bank in the world today and see what it costs to send a payment,” he says. “I’ve travelled all over the world and have always looked out for any banks that position themselves as prominent in remittances, and there are none.” Banks just can’t afford to offer services at the same level as remittance firms, says Giriyan. “We are talking about bringing the cost per transaction down to 5% and then 3%. I don’t think they are figures the banks can even contend with.” Banks are always looking for stickiness in their customers. The last thing they need is for a customer to move away, so migrants are a low-priority target for them.


Target list


For Xpress Money, the future looks bright but there is more to do. “We are growing our network for cash, for account credits, for mobile wallet credits,” says Giriyan. “In the next 12-24 months’ time we aim to be present in every country on the planet.” There are pockets in which Xpress Money doesn’t have a deep footprint. “We cover about 80% of Africa but there are areas in the south we still need to build up in.” Oceanic countries and a few locations in South America and Eastern Europe are also on the target list.


The firm is also looking into adding more value to customers, and continuing its reputation as one of the lowest cost-per-remittance companies in the market. “We continue to adopt technology, and are making sure we invest into technology and compliance,” he says. “The world is always changing and will be a different place in few years’ time. You have to be ahead of the game.”


www.ibsintelligence.com


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52