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Money Transfer Startups: race against time?

Money transfer startups - Race against time

“High fees, large incumbents, and a $400B+ market are under attack by a slew of remittance startups.”

– CB Insights, February 26, 2015

The best feature of being a startup during a bubble is TIME. Investors, usually impatient folks, are doing much better and encouraging startups to focus on growth rather than boring corporate stuff like “revenues” or, even worse, “profits.” Why bother with positive cash flows when investors are stuffed with money and more are available with a quick WhatsApp message? This is especially true when considering such seemingly easy and huge market as international remittances: $0.6T in size, ruled by one, hopefully, incompetent, colossus:

Money Transfer Providers X-border Volume Comparison for Previous 12 Months 2017 Q3

International remittances market is also expanding. The World Bank is projecting 3-4% annual growth in the coming years. More importantly, due to proliferation of inexpensive smartphones and displacement of elders with tech-savvy millennials, the usage of mobile for sending and receiving money might be about to skyrocket.

Remittance startups expectations for growth in online usage - June 2015

Remittance startups expectations for growth in online usage – June 2015

Money Transfer “Disruptors”

As the result, we now have 4 well-funded startups, all following Xoom’s dream from a decade ago to be a better version of Western Union:

Except TransferWise, these companies remain tiny in comparison to the market leaders in transfer volumes…

… and are mostly behind their digital cross-border revenues:

Money Transfer Providers Digital X-border Revenue Comparison 2014-2017 Q3


Because of targeting a small niche of digital-savvy consumers, so far Fintech has made almost no impact on cost of remittances:

WorldBank Cost of Sending $200 till Q2 2017


But a very broad cross-section of investors remains optimistics and have dropped close to $1 billion on this quartet since 2010:

Funding Rounds of Remittance Startups, Dec 2017


So TransferWise has received the most funding so far, then Remitly, and WorldRemit. Azimo has received the least amount.

Let’s now compare amounts of funding with valuations for these startups and the revenue multiples vs. industry incumbents:

Remittance providers - Latest Market Cap or Valuation, Dec 2017


So why do investors value and fund these startups so differently? What could explain such variability among four almost identical mobile apps on the same mission to “disrupt” banks and incumbents? Let’s consider the same funding data but on a different timeline – years since the seed round:

Funding Rounds of Remittance Startups - years from Seed round, Dec 2017


Money Transfer Startups Are Vastly Different

All 4 startups got the seed round at point “0” but what happened next has varied significantly, both in timing and amounts. After 6 years, Remitly passed $4 billion in annualized transfers. It might seem like a lot, but not when compared with TransferWise‘s trajectory. Two companies were founded at about the same time and received their first $1M+ funding in April of 2012. However, TransferWise reached $2M monthly transfer volume only a year later and more than 2 years before Remitly. By mid-2015, TransferWise was transferring thirty times more per month than Remitly:

TransferWise vs. Remitly - Comparing Transfer Volumes

The underlying reason is in TransferWise’s much faster scaling. In the first three years, Remitly launched, albeit large but only one corridor: USA-to-Philippines. In February 2015, the startup launched the second corridor, USA-to-India, and in October 2015 – USA-to-Mexico. In July 2015, Remitly also announced its first acquisition of a failing application Talio to bring in a local talent (both companies are based in Seattle) and beef up messaging features in Remitly’s mobile technology. In April 2016, Remitly opened outbound business from Canada to India and Philippines. In September 2016, the startup added seven more countries in Latin America for transfers from USA:


In early 2017, Remitly launch couple outbound corridors from UK, and its growth trajectory seems unstoppable:

Remitly Transfer Volume and Revenue in 2014-2017 Q3

In fact, before 2017, Remitly has been growing faster than any of the established digital players during 2014-2015:

Digital remittance providers YoY Revenue Growth 2015-2017Q3

So it is not surprising for a hyped-up digital remittances niche that in the October 2017 round Remitly was valued “at least” $345 million.

Remitly Headquarters

However, during about same time, TransferWise launched hundreds corridors and passed $1 billion transfer volume per month milestone, reaching $1 billion in transfers during its very first 12 months in the US. As you noticed in the chart above, by late 2016, both Remitly and TransferWise were growing 100% year-of-year, except that one of them was five times larger than the other.

What about Azimo which funding and valuation are also significantly lower than TransferWise and WorldRemit’s? Please take another look at the chart with funding amounts by years since a seed round. Azimo is clearly slowing down with the last $15 million round in May 2016. You might also remember a chart above where Azimo has the smallest valuation multiple being much closer to Xoom. Why? Because similarly to Xoom, Azimo has been limiting its growth ambition to just one geography (in Azimo case, it is Europe, for Xoom – USA). Finally, Azimo’s P&L structure has a disproportionate administrative expense:

Azimo 2015 2016 summary (April 2017)

The explanation for WorldRemit’s lower valuation is the same: relatively weak planning and execution, although the difference is less dramatic. For example, by mid-2015, WorldRemit significantly overestimated how fast it would be growing across markets – as the result, it had to layoff employees in both USA and UK. Compare it with TransferWise’s claims about performance in USA or gaining 10% market share in UK. By early 2017, WorldRemit was so focused on growth in the US that it slashed pricing by two-thirds in two top corridors, losing ~0.5% on each transaction:

WorldRemit FX Markup India and Mexico till June 23 2017

Another insightful comparison between TransferWise and WorldRemit is via employee reviews on Glassdoor:



WorldRemit’s uneven management was also evident in some forecasting misses. In June of 2015, CEO expected to triple 2015 revenue vs. 2014. By November, it downgraded expectations to “at least double”… and finished 2015 with 80% growth. Apparently learning from those mistakes, by 2016 the performance clarity was back on track. Company was expecting 50% growth in revenue that year which was delivered coupled with a positive effect from scaling:

WorldRemit Performance 2011-2017 Dec 9


In 2017, there was another overestimate – in later September, WorldRemit was expecting to grow “more than 50%” but less than 2 months later, in early December, the expectation subsided to 46%. Regardless, WorldRemit’s 50% year-over-year growth is impressive except TransferWise is growing at 100% at twice the revenue. That is why WorldRemit’s most recent valuation was $0.7 billion compared to $1.6 billion for Transferwise.

Money Transfer “Pie”

So among this quartet, TransferWise seems the most promising. But why does it matter if the remittances market is huge and growing? Wouldn’t any provider with some degree of success reap a major windfall? Yes and no.

In such highly speculative field as startup investment one doesn’t have to worry about details as long as there are other investors who worry even less about those. Most of investors in VC or corporate worlds are not “smart”: among established companies, failure of M&A is 70-90%, among VC-backed – three-quarters, so it is likely that any of these startups could be acquired with a significant premium in 2017 and maybe even 2018 before the next FinTech bubble bursts.

Other People Money - Money Transfer

But what if these startups were hoping to build a long-term sustainable business? Let’s start with projecting the overall market size into the foreseeable future. Despite $0.6T of money transfer volumes, due to low margins the international consumer remittances is a relatively small global market. The revenue “pie” is approximately $35B with around 90% of money transfer volume sent in cash. While transfer volumes will be increasing, the margins will keep declining (assuming 1% in next 10 years) and consumers will continue slowly switching from offline to online method of sending money (around 30% in next 10 years), resulting in a significantly smaller revenue “pie”:

International Money Transfer - Volumes and Revenues change 2015-2025

To put these numbers into perspective, McDonalds revenue is $25B while Starbucks’ – $16B. Which means that thousands of banks and small money transmitters, myriad of bill payment and bitcoin-based startups, incumbents, plus this quartet of startups are all competing for the global marketplace that is heading to be the size somewhere between Starbucks and McDonalds… except those two are making handsome income from that revenue, and these startups are bound to be breaking even at around 0.5% in online margins by 2025 (read more about costs in another SaveOnSend article).

Money Transfer Startups Differentiation

By they way, some providers understand that they are in a long-term battle for pricing themselves out of business and wouldn’t mind being acquired. Some, like Azimo, discuss it openly (here), some are asking around for potential suitors more privately hoping to cash out on their dreamy valuation multiples. While many startups play the numbers game, the closer to IPO, the more scrutiny will be applied to its performance. One key metric is the operating cash flow that shows whether a company is burning through or generating cash. Here is an example of such analysis for MoneyGram:

Research Analyst Assessment of MoneyGram's Performance by Zacks - April 10, 2015

Research Analyst Assessment of MoneyGram’s Performance by Zacks – April 10, 2015

So how are these startups taking on Western Union while competing among themselves and thousands of other providers globally? Apparently, through differentiation:

Azimo CEO & Co-founder, Michael Kent - Source: TechCrunch, June 15, 2015

Azimo CEO & Co-founder, Michael Kent – Source: TechCrunch, June 15, 2015

In the same TechCrunch article, Azimo’s CEO & Co-founder continues “$700 is the average transaction size… That’s the difference between us and TransferWise…” And this is how WorldRemit’s Head of PR describes differentiation with TransferWise:

WorldRemit Differentiation vis-a-vis TransferWise - WorldRemit's Head of Pr

Differently from Azimo, WorldRemit’s ambition is global in scope with around 40% of revenues already coming from non-Europe-based customers:

WorldRemit Revenue Breakdown by Region 2015-2016


WorldRemit’s emphasis on mobile payments and larger portion of African migrants among customers leads to a much smaller average transaction size:

Remittance providers - Average Send Amounts Dec 2017

So there is a clear difference in strategy, but is there some uniqueness in these startups’ business model, product or service? If Starbucks didn’t have a unique business model or wasn’t making a great coffee, no amount of branding would have helped (and it didn’t – Howard Schultz had to return as CEO in 2008). So let’s try to identify what differentiates these startups among themselves or what differentiates them versus Western Union’s Digital Ventures, Xoom or Transfast.

Not much from a business model perspective. We already covered P2P’s marketing phenomena in our article on TransferWise, and all other business processes are largely the same (read SaveOnSend article on that topic). Maybe low pricing? TransferWise, while not the fastest, has by far the lowest gross margin (<1%) and clearly builds its PR/marketing around this differentiation angle:


Comparison of Providers: USA to Mexico, $500 transfer, bank-to-bank linked accounts, December 6, 2016

TransferWise’s pricing is both, typically, lower and more stable when compared to other providers. We already showed a pricing graph for WorldRemit, now look at fluctuations for MoneyGram and Xoom:

Xoom Mexico FX Markup till June 23 2017

MoneyGram FX Markup Philippines and Mexico till June 23 2017

In rare cases, TransferWise could be expensive in corridors where customers are price sensitive and less loyal, so all providers have to compete on price. See the table below for an average remittance amount from USA to India and check other corridors with SaveOnSend app:

Comparison of Providers - USA-to-India, $1,500, bank-to-bank, May 22, 2017

Comparison of Providers – USA-to-India, $1,500, bank-to-bank, May 22, 2017

Also, as margins start to decline, the difference in prices across providers in absolute dollars (or other currency) would be getting smaller, thus, creating an ever diminishing incentive for customers to switch.

WorldBank Ave and WAve Price Index till Q2 2017


Mobile apps across incumbents and startups are pretty much look-alikes and their service quality is comparable. As we describe in another SaveOnSend article, providers’ acquisition toolkit and costs of online remittances are also similar.

So what is left? EXECUTION. For example, every provider has a referral program, but for some it brings 50% of their customers and for others it is a minor channel. For the same reason why TransferWise has accomplished so much more than Remitly, the execution will be a defining factor in separating winners vs. merely survivors in this race against time. To a large degree, it will be up to these ten highly capable leaders:

Leadership of Remittance Providers - June 2015

Top row: WorldRemit, TransferWise, Azimo, Remitly
Bottom row: Ria Money Transfer, MoneyGram, Western Union Digital Ventures, Xoom, Transfast

When writing about Bitcoin in another SaveOnSend article, we encountered plenty of teams among Bitcoin remittances startups who are good-hearted, idealistic and hard-working, but not that knowledgeable about consumer remittances. Our interactions with startups mentioned in this article point to a more cynical and, at times, less respectable approach to growth, but also to much stronger teams. There is no question that in the online part of remittances (albeit, currently only 10% of all international money transfers), these startups present formidable global competitors and TransferWise removed any lingering doubts with this announcement in June 2015 that it zoomed past Xoom:

Cross-border Revenue_ Online Providers

In this context, it is helpful to understand Xoom’s history as one of the scenarios for startups mentioned here – read this SaveOnSend article. Plus, up till now, it has been relatively easy to raise money for remittance startups:

However, when another downturn comes, investors will again remember the millennial-old adage:

Sam Altman Quote on Importance of Earnings

As we already discussed, most of remittance startups understand that they are running against the clock and only have another couple years to get acquired or go public. WorldRemit’s recent round with no increase in valuation makes such concerns every more real. When hype disappears, a startup with $50 million in revenues, quickly declining growth, and zero-to-negative profitability is called a “struggling business” and gets subjected to a boring analysis like any publicly-traded company. Here is an example from a founder of another “fintech startup,” a hedge fund that invests in small-cap companies in financial services (July 7, 2015):

“I think that MGI should be at discount to WU because: (1) MGI 5% market share vs. WU 15% for a fixed-cost business drives MGI gross margin 14% vs WU 26%, (2) MGI has higher financial leverage at 60% vs WU 16% so should have lower P/E or free cash flow yield, and (3) Walmart overhang — Walmart introducing their own private label and is still ~15-20% of MGI transactions / revenues from 25-30% 12-18 months ago. Now MGI should be cheaper than WU, but the question how much cheaper and that’s more art than science. It’s at 6.4x EV/EBITDA trailing vs WU 8.8x and projected ’16 4.2x ’16 EV/E vs WU 8.4x. One problem is that when your trailing EBIT margins at 6% (vs WU 21%) and the business still declining and has financial leverage, it can go to 0% margin quick and then stock ain’t that cheap. It seems that the management discussed that earlier this year that they expected double digit growth resuming in Q4’15, but there remains to be lots of uncertainty. My guess that if consensus ests for 2016 right, the growth resumes, then the stock too cheap at ~4.2x EV/E and 9x P/E.”


Hopefully, you found this overview helpful in developing your own point of view on which of these startups has a shot at becoming a remittance incumbent in the foreseeable future. Which startup do you think is capable of eventually catching up with TransferWise? Please explain your brief rationale in the comments section below.

We will be keeping this post regularly updated, so come back soon!

  • James Creighton

    Astounding! Not once is “bitcoin” or “cryptocurrency” mentioned.

    • Thanks for commenting, James. Actually, it is mentioned twice 🙂

      And we have the whole article just on Bitcoin:

      Let us know if we missed anything. All the best!

      • James Creighton

        Thanks – I had to read it again to pick it up. Why was this hidden (certainly to a scan-reader like me) when the bitcoin element is so crucial to efficient money remittance? This – the essential element of bitcoin in remittance payments – should be made more prominent – to get the message “out there”. The name should’ve been in the title – or, at least, in the first and last paragraphs (you do realise, I hope, that with so much literature to read many just read these parts of articles – i.e. title, first and last paragraphs).

        • sketharaman

          I’m a business based out of India and my customers are in USA. How do I get paid in Bitcoin today and meet my current month’s payroll, vendor payments and tax deposits in fiat currency? As of now, none of these expenses can be paid in BTC. If you’re going to tell me that I can go to some BTC exchange and convert BTC to fiat currency, who bears the conversion cost? I’m a fintech marketer and I know that BTC is the future and all that but we all need solutions for today and tomorrow, without which we won’t be around when that mythical future date comes – or doesn’t come!

          • James Creighton

            Presently, the barrier to the free use of bitcoin are the (monopoly) banks. They are dead scared of bitcoin – and quite rightly so – it will one day put them out of business unless they adapt to it. Bitcoin has characteristics highly suited to a global economy (using the internet). In the near future increasingly, international transactions will be conducted in bitcoin – with on- and off-ramping (into respective currencies) at the two ends of each deal. Then, later on, people won’t even bother converting into respective currencies – then bitcoin will be the global currency – completely resistant to debasement by government. Until that time arrives Sketharaman – just continue as you have been doing. You will know when the time is right to make the change – and that will be within 5 years (at the outmost).

          • sketharaman

            Yeah right, I’ll frame this and hang it on my wall and keep updating it every 5 years, like I’ve been doing other predictions for the past 10 years or so: Cash will be gone in 10 years. 20xy will be the tipping point of mobile payments. Here’s my prediction and you can feel free to frame it and have a look after 5 years: Forget BTC becoming mainstream in 5 years or fiat currency going out of circulation in 5 years, even checks won’t go away by then.

          • And I’ll second all of that …
            Bitcoin fanboys are as delusional as Apple Pay fanboys …

          • sketharaman

            @PhilipCohen:disqus I totally agree that BTC fanboys are delusional. But, on Apple Pay, my views are slightly divided. I’m not an Apple Fanboy but I still think it’s easily the best mobile payment method in the market today. And, in India, for online bill payments, HDFC Bank’s PayZapp, released a week ago, is definitely a game changer.

          • Apple Pay may well be the best of the “mobile” devices; but, you will note that all that hot air that was being generated by the Apple Dept of Spin has finally started to cool, and what now is Apple Pay’s share of the payments market? Very little is seems. And, methinks now that the likes of Android Pay and Samsung Pay are out and about and not getting a share of the banks’ fee, it will not be long before those lemming banks, that allowed themselves to be stampeded into the Apple Pay deal, will be rethinking that fee-sharing arrangement; indeed, it should be the other way round, Apple should be paying the banks for the banks letting Apple use their payments system to better market their new iPhones to the fanboys …

            Re Bitcoin. I could well imagine the banks eventually adopting such a system to improve on the clunky system of international payments that presently exists; but, that retail payers/payees are going to get seriously involved (particularly buyer-payers) with what is effectively a volatile foreign currency requiring an FX transaction at each end, and having none of the statutory protections that are provided by the credit card system, methinks is utterly delusional …

          • sketharaman

            I use Android. As I said before, I’m not an Apple FanBoy. Still, I believe that Apple deserves the 10 or 20 bps that it gets from banks to process Apple Pay transactions because – unlike Google Wallet or Samsung LoopPay – only Apple Pay does tokenization, the functionality resulting from which feature is an an integral part of payment processing, which banks otherwise have to provide for.

            Re. Bitcoin, I totally agree with you. Xoom to Xoom, PayPal to PayPal – all these cross border solutions already exist where the same company exists on both ends of the transactions, thereby avoiding the clunky system of correspondent banks in interbank crossborder payments today. As long as BTC is not the fiat currency, I fail to see much difference between BTC and PayPals of the world.

            I just realized that if you could take an equivalent situation and find the same bank on both sides of a crossborder remittance, the present banking system is not clunky at all. I used to transfer GBP from my Citi UK a/c to INR in my Citi India a/c via Internet Banking. As soon as I clicked the TRANSFER button on the former system, I could click the REFRESH button on the latter system and find the amount credited to my INR account. That’s realtime crossborder processing with total visibility – a UX / CX that’s unmatched by the PayPals or the BTCs of the world.

          • Agree, agree, agree, but …

            “… only Apple Pay does tokenization, …”

            Me being only an outsider struggling to see past all the marketing hype, I would question the accuracy of that statement; after all, it is MasterCard and Visa that developed “tokenisation”—not Apple—although you would never know it from all the hot air that has been generated out of the Apple Dept of Spin …

          • While we are at it, a few words on PayPal. Notwithstanding all the hot air generated by the alleged spin off from eBay, “PreyPal” and eBay will be forever joined at the hip, and they will remain, as long as eBay is around, dependant on each other—PayPal, in particular, is dependant on eBay. The problem for the clunky “PreyPal” is that the eBay marketplaces is continuing to atrophy, no thanks to eight years of insane policies applied by the last CEO, the cretinous Johnny Ho-Ho-Ho. Also, there is now serious professional online (and mobile) payments competition from the banks in the form of MasterCard’s “MasterPass” and Visa’s “Visa Checkout”. Methinks we can safely predict that in five years time the clunky, unprofessional, unscrupulous, non-FDIC insured, unlicensed (faux) bank, “PreyPal” will be noticed only on whatever there is by then left of the dying eBay marketplace, or as the merchant account provider “of last resort” for those small online merchants that don’t have the confidence of their retail banker; indeed, the online merchant desperate enough to be offering only “PreyPal” as a payment option will actually be telling you that he is not a “professional” …

          • Kufandada

            I am setting up a remittance disruptor to Africa and enjoyed reading this article.

          • Good luck, Kufandada! Please keep us posted on your progress.

          • sketharaman

            Having spent nearly 10 years on retail payments between an Oracle and a MasterCard subsidiary, I think I qualify as an insider but I haven’t followed tokenization all that closely. The reason for that perhaps supports my contention that “… only Apple Pay does tokenization, …”. The way I remember it, V/MC released the standards for tokenization in c. 2009. I remember being very excited about it. However, from then until tokenization was actually used in Apple Pay in 2014, I never heard about a single real-life implementation of the technology. Which is why I tend to believe that Apple Pay was the first implementation of tokenization standards set by V/MC.

          • Apple may well have been the first to use it but my impression is that, as you say, the standard was developed by MasterCard/Visa, and, that the Samsung and Android “mobiles” will also be making use of “tokenisation”; indeed, I would presume that it was a requirement that they use same for them to be allowed “direct” access to the MasterCard/Visa systems, rather than them simply acting as non-interactive merchant account intermediaries, as does the likes of the clunky PayPal operation …

          • JibberJabberFule

            Well said!

          • JibberJabberFule

            I too am going to frame this – it’s absolutely priceless!

          • James Cole

            @sketharaman:disqus @JamesCreighton49:disqus check out for B2B cross border transactions using the blockchain. The service picks up and delivers domestically in fiat currency but uses Bitcoin/blockchain to move & convert between currencies. Full disclosure – I work for Align & happy to talk to you about it in more detail if interested.

          • sketharaman

            @disqus_jAyF3fIHZ5:disqus TY for your input. A quick glance at your website piqued my curiosity! I’m interested in knowing more. Please email me at so that we can set up a time to talk.

  • sketharaman

    Nice article, albeit a bit long. But due to my background in remittance fintech in Oracle Financial Services, I didn’t tl;dr it! I think these are all providers of consumer remittances. How about business remittance – do you know of any alternatives to bank wire transfers? My company is based out of India. We have customers in USA. For reasons highlighted in my post , PayPal is a disaster. There was an instance in the past ( when we were left with no alternative but to complete a US-India transaction by using check (which we rarely use nowadays for domestic payments)! Our customer FedEx’ed a US$ check from Chicago, we got it 3 days later, we deposited it into our local bank branch the next day and got INR credit in our bank account after 35 days. But it worked flawlessly!

    • Hello, thank you for your comment. Looks like the was a break in the URL for the post you mentioned.

      Yes, our blog is only focused on consumer remittances – it is complicated enough and we are just scratching the surface in our understanding. We hear that business remittances are quite different – please try contacting Transferwise and Transfast and let us know afterwards which one was better at helping you.

      • sketharaman

        TY. When I last checked, TransferWise did only consumer remittances. I haven’t heard about TransFast. I’ll check it out and let you know. BTW, the URL for my first post is:

        • sketharaman

          Checked out TransFast. It does not do B2B remittance. According to its website, TransferWise allows a “you” in USA to remit money to a business in India. Not clear whether “you” must be a consumer or can also be a business. I’ve reached out to T’Wise seeking a clarification and will update this comment if I hear back.

          • sketharaman

            TransferWise has reverted back confirming that it supports remittance from Business in USA to Business in India.

          • Roshan

            @sketharaman:disqus email at roshan.polepalli at and I will have you setup with our transpay business solution.

          • sketharaman

            Unfortunately, it’s too late – the remittance has already been initiated on Bank of America @ US$ 50. It might help updating your website to give more prominence to your business solution LOB. From what I could make out when I visited it, there was no mention of business current account.

  • “PayPal to Acquire Xoom”

    SAN JOSE, Calif. & SAN FRANCISCO–(BUSINESS WIRE)– PayPal, Inc. and Xoom Corporation, a digital money transfer provider, today announced a definitive agreement under which PayPal will acquire Xoom for $25 per share in cash or an approximate $890 million enterprise value. The transaction represents a premium of 32% over Xoom’s three-month volume-weighted average price and was unanimously approved by the Boards of Directors of both companies, as well as the Board of eBay Inc., PayPal’s parent company.

    Let’s then hear it from Xoom as to why they had previously (24 March 2010) banned the use of PayPal as a source of funds for their money transfer services …

    “Why Xoom Ended The Use of PayPal as a Payment for Money Transfers

    “At Xoom, our core business is money transfer for friends and family remittances. PayPal funded transactions are mostly for commercial payments which is not the core Xoom business. Since commercial payments are not our focus, we cannot effectively vet the merchants asking for payments through Xoom.

    “Why Did Xoom Do This?

    “First, our customers had too many bad experiences with unprofessional or, in some cases, fraudulent merchants. We’ve decided to stop supporting PayPal to protect the interests of these customers”

    Should be interesting to see how “PreyPal” handles all the “unprofessional or, in some cases, fraudulent merchants” that Xoom complained of …

    • Philip, thank you for this great background info! Indeed, would be interesting to see if/how PayPal and Xoom could integrate their processes both on back- and front-end. There is something intriguing about a single provider who could offer transfers of $10 or $10MM without friction and at a lower price point, but you are right that the C2C, B2C, and B2B processes are quite different.

      • Xoom claimed to have been only interested in person-to-person (C2C) transactions, preferring to avoid the complications that can invariably come with B2C transactions; and “PreyPal” already does such C2C transactions for PayPal users (email address to email address), quite successfully, as I understand. One then has to ponder what PayPal is getting for its ~$1 billion of shareholders’ funds (bearing in mind that eBay’s long shareholders have never had a cash dividend)—other than generous kick-backs for all those involved in arranging the deal; no doubt eBay’s (soon to be PayPal’s) Johnny Ho will be expecting a cut of the “grease” that’s probably been applied to facilitate the deal …

        The other problem for these “money transfer” pretenders, even including Western Union, is that one day soon I suspect that the world’s retail banks are going to extract their fingers from their you-know-where and take over this money transfer business themselves; they are the ones in a position to do this process most effectively, directly, bank to bank, and why should they share this potential revenue with these many intermediaries? The banks have done it effectively with “plastic card” transactions, why not simple money transfers?

        • Banks tried many times and some are still trying (, but it is such a small portion of their P&L and it bring so much KYC/AML headache that the trade-off is just not worth it. Plus, it is a shrinking industry.

          • I’m assuming it would not be done by individual banks but via the likes of the banks’ existing B2C partnerships with MasterCard/Visa; after all, what’s the logistical difference, except that B2C transactions are “pulled” by the merchant, and C2C transactions are “pushed” by the payer and therefore the potential risk of the unscrupulous merchant “puller” is not present …

            For the same reason I think that MasterCard’s apparent present concept of marketing their “MasterPass” service as a white label product for individual banks to market under their own name is utterly incomprehensible …

            You will notice that Visa is advertising its “Visa Checkout” service under its own brand; MasterCard’s current policy is as stupid as it would be to market a credit card under an individual bank name; indeed, I suspect that’s why Discover Bank’s cards are still waiting to be discovered …

  • Haseeb Awan

    Fantastic post.
    What is the reference to this

    The revenue “pie” is approximately $35B with around 90% of money transfer volume sent in cash

    • Thank you, Haseeb! There seems to be a consensus that consumer x-border money transfers are close to $600BN in volume with 6% weighted-average margin, hence, around $35BN in revenues. The 90% approximation comes from analyzing 10Ks of incumbents.

      Please let us know if you come across materially different estimates.

      • Haseeb Awan

        I am in agreement with the revenue pie, however 90% of the money transfer volume is in cash was a statement that I wanted a reference to. It would be appreciated if you are able to or any stats on online vs offline money transfer stats.

        • 10Ks and presentations to investors of publicly traded providers, all found on their corporate sites

          • Haseeb Awan

            Is there any link you can share ?

          • Try Google search for a company name and “annual report” – you will see links to the appropriate sites, e.g., for Western Union –

          • Haseeb Awan

            Thanks a lot

          • Kufandada

            Also depends on how you define “cash transaction”.Does this refer to cash paid at agencies?Is an online transfer to a bank account cash versus a web based card transaction?

          • Typically, we refer to “cash transaction” is when cash is given to an agent in an outbound country and received from an agent in an inbound country

  • John Alex

    Funding is very important for any startup, so read some stats of funding companies :-

  • Pankaj

    Thanks for this helpful information I agree with all points you have given to us.

  • Thank you for this very interesting and enlighting article, very nice!
    We have compared the main Providers in regards to remittances to Arabic and African countries, because there are really difference when you look to Details. Have a closer look on to see which app is the most suitable for your purpose.

  • William BENATTAR

    Hi guys,

    Recently read this article and was wondering where you get your data about the volume transacted on each platform from? What does “SaveOnSend” analysis mean? Have you calculated that based on your own assumptions or have you aggregated the data from tangible sources?



    • Hi Will, thanks for reading us. It is usually both. We have to heavily rely on startups’ self-reporting and are expecting that at least some of them play games with numbers, so please keep us posted if you hear about something fishy with any of these players.

  • TGNugget

    I know I’m late to this but thank you for an excellent article. I would be really interested to understand who has the best operating model or are the new players you’ve analysed the same? Do they all hold cash? How are they actually transferring funds to the recipient? Are they simply using the existing SWIFT infrastructure?
    Love to hear your thoughts and see if anyone can make blockchain work and usurp these guys.

  • Bo Hong

    Thanks for sharing, it’s an awesome article!
    But could you give me the reference of this picture?
    Where’s the data from?
    Thank you 🙂

    • Hello Bo, thanks for reading and kind words! WU, MG, Ria, Xoom – SEC filings, Transferwise, WorldRemit – Companies House in UK, Banks – Call Reports. Plus, variety of other sources, e.g., analyst calls, PR articles, interview. Please let us know if you ever come across a different or better data.

  • Ryan

    Great article, rich in info. As you have mentioned, only 10% passes through the digital channel. 90% is still cash. But it’s only a matter of time before it shifts the other way around. So all of these players are in the right game. Transferwise is the leader at the moment because they cater only to bank accounts from send to receive and these clients with accounts are early adaptors to this technology. But once the 90% cash customers starts their shift to digital, then I’m putting my money on World Remit. Unlike Transferwise, they serve cash on the receive end. And unlike Xoom (US only), Remitly (US, Canada) and Azimo (Europe) World Remit’s reach in terms of countries covered is a lot larger at this point. Western Union, Moneygram and RIA are great brands with wide reach but do not have the tech background needed for this business model. The Middle East is a crucial market. Whoever is there first will win this game.

    • Ryan, thank you for reading and kind words. The shift from cash to online will take decades, and all these provides could play a role. No point in making such long-term predictions since the environment is so fluid in terms of players, funding, technology, and regulations, As you could see in the third graph, WU, MG, RIA have been growing faster in absolute terms vs. most of these startups. Finally, WU is online in 40 countries including Middle East and will keep adding sizable countries as regulations allow:

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