Opinion on Mobile Payment #4: $600bn global remittance market is “terra incognita” for classic banks
In previous articles, I shared my opinion on the fact that mobile banking does not have a USP yet in developed countries. But there is an extraordinary one in a huge market (I mentioned the first CSP, Omantel alklowing for easy money transfers as the first one globally to allow banking business between private / residential users of their service as a notable exception from the rule).
About a year ago, RBS and Barclays have been motivated to stop their remittance-business, due to lack in governance. The likes of Western Union have happily stepped in, asking users of their service to pay a premium (with the service of Barclays it was reportedly only around 9%, according to The Economist).
On the african continent, M-Pesa, GCash, Ecocash and Tigo have quickly gined momentum – all in the business of allowing individuals to transfer moneys quickly and with little fuzz, cost or more infrastructure needed than one of the ubiquitous “dumb” mobile phones. In the case of M-Pesa, Vodafone has actually been a driving force behind the innovation – not a bank. In the case of GCash, the Phillipine Central Bank has been embracing the innovation, which is of little surprise as a great percentage of the Phillipine gross national product is fuelled by the remittances of expat workers.
In the article, WorldRemit is shaking up the $600bn global remittance market. we are again confronted with another innovation that is taking a huge market and making in-routes to large chunks of business by jumping into the remittance market that has been left abandoned by the classical players.
Whether this is a great result in terms of governance remains to be seen. It certainly opens the market for a different set of players: Those that know telecoms and digital.
source: WSJ. Outgoing Nigerian president introduces ID card with payment function.