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Digital-first remittance company Remitly is partnering with Visa to offer real-time peer-to-peer (P2P) money transfers through Visa Direct, Visa’s real-time push payments platform.
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The partnership enables US consumers to send funds cross-border to Visa debit cards in real time. This offering streamlines the tedious cross-border money transfer process, which can be a game-changing move in the remittances industry.
Here’s what it means: The partnership can address two major pain points with cross-border transfers: speed and accessibility.
- The partnership can speed up transfers. Speed and convenience are two areas consumers value the most in remittances and can greatly influence which provider they select. And speed is becoming an expectation, rather than a preference: 75% of respondents to a PYMNTS study said they want faster payments, for example. Building speed into offerings is integral in satisfying customers who are sending transfers on the front end and improving the user experience for recipients on the back end. By offering real-time cross-border payments, Visa and Remitly’s offering can stand out, considering transfers through other remittance services can take up to several days to complete.
- And the offering can make funds more accessible for the recipient. Remittances are a lifeline for many people globally, which makes it important that they’re as accessible and readily available to recipients as possible. Visa and Remitly’s offering can make funds more accessible to recipients by allowing them to retrieve the money to their existing debit card rather than visiting an agent location to pick up cash. Further, the ability to receive funds in real time to a debit card can make the solution attractive to users: 84% of consumers reported debit cards as their preferred way of receiving those funds, per PMYNTS.
The bigger picture: The lines are blurring between remittances and cross-border peer-to-peer (P2P) payments, which can help both firms boost their respective initiatives.
- Access to Visa’s network can help Remitly stand out in the remittance space.Partnering with a massive global company like Visa to offer instant transfers can give Remitly a major advantage in the crowded remittance space. Offering cross-border funds in real time can substantially boost Remitly’s value proposition. And it can boost Remitly’s volume beyond the $6 billion in annualized volume it currently counts.
- Visa has been positioning itself for global growth. Visa’s cross-border payment volume grew 10% annually in its fiscal Q4 2018 (ended September 30, 2018), which is consistent with the year earlier. The firm has been working to build out its cross-border services like Visa B2B Connect, its cross-border business-to-business (B2B) payment platform. And earlier this year, Visa was in a bidding war with Mastercard to acquire Earthport, a UK-based firm that provides an API to remittance firms and banks to streamline their cross-border money transfers. Mastercard ended up retracting its latest offer, leaving room for Visa to finalize its bid. Partnering with Remitly can allow Visa to grow its cross-border business and capitalize on some of the massive digital remittance volume: Business Insider Intelligence expects digital remittances to reach $387 billion by 2023, up from $225 billion in 2018.
More to Learn
The Digital Remittances Report from Business Insider Intelligence identifies what young, digitally savvy users value in remittances. It also details the concrete steps that legacy and digital providers can take to effectively capture this opportunity and monetize digital offerings — the primary growth driver — to emerge at or maintain their presence at the forefront of the space.
Here are some key takeaways from the report:
- The global remittance industry recovered from a two-year decline in 2017 to reach a record $613 billion in transfer volume. That growth will continue and will be fueled by digital remittances, which Business Insider Intelligence expects to grow at a 23% CAGR from $225 billion in 2018 to $387 billion in 2023.
- There’s a new segment of customers that both legacy and digital firms are competing to grab share of. Young, digital-savvy consumers are the customer segment that all firms are vying to reach, which is creating a highly competitive dynamic. The needs of those consumers will precipitate transformational change in the industry.
- We’ve identified several tangible steps firms can take to improve in four key areas — cost, convenience, speed, and security — to not only attract but also maintain this customer segment to align with their preferences and ultimately win in the space.
In full, the report:
- Outlines the global remittance landscape and sizes the opportunity that the industry presents.
- Identifies the new audience for remittances and future drivers of the remittance space going forward.
- Discusses four key areas that providers can focus on — cost, convenience, speed, and security — to improve offerings and ultimately capture that shifting audience.
Interested in getting the full report? >> Purchase & Download It Here
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