WSJ profiles newer remittance FinTechs such as TransferWise, WorldRemit, and Remitly, as well as incumbents such as MoneyGram and Western Union. No matter the digital approach, the $600b in annual remittance payments worldwide presents a huge opportunity for FinTech.
The differences in fees can be significant. Sending via banks alone costs about 11% of the money transferred on average; sending through a traditional money-transfer agent costs around 6%, while sending it via phone using mobile operators costs around 3%. Each company plans to go global, but many have strengths in the most heavily used remittance routes. Seattle-based Remitly is doing well in U.S.-to-Philippines remittances, for example, Singapore-based InstaReM is strong in Australia to India and TransferWise, the U.K. to Europe. TransferWise serves millions of people and has already grown into a unicorn with a valuation of $1.6 billion, after raising $280 million in a tough environment last month. WorldRemit earlier this month said it had raised more than $220 million but wouldn’t disclose its valuation. Remitly has just raised $115 million at an undisclosed valuation.