Barclay’s Enables First Remittance Corridor between UK and India through Pingit, $55 Bn to be Remitted via Mobile Phones by 2016

September 3, 2014     By : Chiraag

Remittances market is huge and growing exponentially. Mobile Remittance seems to a perfect option for existing players to cut cost and increase margins. According to the World Bank Report 2012, it is estimated that close to $55 billion will be remitted via mobile phones across the globe during 2016. This will be four times the amount that was transferred through this technology in 2011. Recently, international financial services provider – Barclays – launched a new function that enables mobile payments to India via its Pingit mobile payments service.

Barclays Pingit was launched in February 2012. It was the first service in U.K to facilitate the instant payment as well as receipt of money utilizing mobile phone numbers to anyone with a UK current account and UK mobile phone number, without the requirement to share bank details. Using the Faster Payments Scheme, payments are immediate and the app is free to use for retail customers of any UK bank.

  • The app will now enable users in the UK to transfer payments to friends or family in India, utilizing just a mobile number.
  • This is a first as neither the senders nor recipients need to be Barclays customers, stated the firm.
  • Barclays Pingit users in the UK just need to send a payment utilizing the mobile phone number of the intended recipient in India.
  • The sender is not required to obtain any swift codes, sort codes or account numbers of the recipient.
  • Thereafter, recipients will receive a registration notification for the first time, or once registered an alert to confirm payment has been made.
  • Payments can take up to 48 hours, said Barclays, and there transaction range lies between a minimum of £25 and a maximum of £1,500.

“The Indian market is the market with the highest volume of remittance from the UK, worth over £2.5 Bn. The latest function has been designed with the strong heritage between the UK and India in mind,” stated Barclay, in a press release. “There are 1.5 million British Indians and 1 million students and visitors who currently live in the UK, many of whom regularly send international payments to loved ones and contacts in India.”

“Pingit payments to India is a huge step for the international mobile payments market. Our goal is that no-one is left behind in the current digital revolution, and this launch demonstrates continued innovation by Barclays to meet the needs of UK consumers. It also marks an important step for future Pingit development and opportunities internationally,” commented Ashok Vaswani, Barclays CEO for Personal and Corporate Banking, in the same press release. “Barclays Pingit is available to both customers and non-customers and can be used by anyone with a mobile phone number in the UK. Since launch in February 2012, the free app has over 3m downloads and over £600m has been sent through the service,” he added.

Some of the other players operating in the Mobile Remittance Space: 

Currency Cloud: 

Launched to market in 2012, The Currency Cloud offers Cross Border Payments as a Service. The company has received a total funding of $7 Mn through investors Atlas VentureAnthemis Group andNotion Capital. More than 250,000 corporates and consumers already have access to The Currency Cloud’s XBPaaS platform through more than 100 platform partners and customers.

The Currency Cloud offers end-to-end cloud based cross currency payments automation service that makes multi-currency payments more frictionless. On 11th February 2014, The currency cloud announced a major revamp of its payments service – new streamlined payment integration, new look and other features.

TransferWise:

TransferWise was founded in London in March 2010 by TaavetHinrikus and KristoKaarmann. It was backed by investors like Peter Thiel of Valar Ventures (founder of Paypal and Facebook’s first investor), IA Ventures (an early stage VC investing in companies creating competitive advantage using data), Index Ventures (Technology VC firm), XavierNiel of KIMA ventures and Seedcamp with collective investment amounting to $6 Mn as of May, 2013.

TransferWise offers a disruptive solution to individuals sending money from one country to the other (involving different currencies). A normal transfer of £1,000 into Euros using Western Union can cost over £100 once you add in exchange rates and other fees, whereas through a bank wire transfer cost £50. TransferWise offers the same transfer at an attractive rate of £4.50, a direct savings of atleast over £45. The remittance platform offered by TransferWise is aimed at expats, retirees, overseas workers and small and micro enterprises.

Regalii

Regalii was found in 2011 by Edrizio De La Cruz. Regalii is backed by investors like Zac Zaetlin who is a Board Member at Zipongo, Hiro Maeda founder of Open Network Lab, Tom Van Laan, Ex-CEO of COADE, Inc and Funders Club. They have received a funding of $350,000 from Maverick Capital and YCombinator.

The business model of this startup is to allow migrants to send money for food and bills to their families through SMS. Regalii charges $3 for every SMS sent. Regalii has approvals to operate in 8 countries and are tied up with 7,200 retailers. Their partners include Benavides (largest pharmacy in Mexico) and Elektra (largest electronic retailer in Mexico). Over 1,100 customers used their services in one of the weeks in August 2013.

Azimo

Azimo, is a global payment processing business providing internet and mobile based inter-country consumer money transfer services. Azimo was founded 2012 by Michael Kent and Marek Wawro. The company received funding of $ 1Mn as a seed Investment from Matt cooper and e.ventures.

Azimo enables user to send money via Facebook. The sender invites their intended recipient to sign up to Azimo via an automatically sent Facebook message. The recipient then logs into Azimo’s Facebook app and fills out their details, including where they want the money sent to, which could be one of the 150,000 payout desks in the 190 + countries supported, a mobile phone ‘top up’, or a bank account.

Azimo recently emerged as one of the winners of the SevenVentures Pitch Day at NOAH conference 2013. The company won a $1.36 Mn advertising budget. On 19th November 2013, Azimo expanded operations to launch its money transfer remittance platform in Ireland and Germany. This increases the number of countries that Azimo operates in, to 192 Countries.

Ripple

Ripple makes it easy to send money anywhere in the world, in any currency – instantly and for free. It is perfectly suited to support merchant payments, wire transfers and remittances. The goal is to connect the world of money much like email does for communication. The result will be faster, cheaper and far-reaching applications for everyone – regardless of where they live or even if they have a bank account.

Users simply need to load money to an active Ripple wallet through a participating gateway. For example, someone could link his/her bank account to US gateway SnapSwap to fund his/her Ripple wallet. Then he/she can send it in any currency he/she desires to a Ripple user based in China who could accept payment in a completely different currency through a transaction that happens in less than five seconds and costs only a minimal fee. That user can then transfer funds to their own local gateway like RippleCN or Ripple China to access the money outside of Ripple.

Prepay Nation

Prepay Nation is a US based company in the business of enabling international mobile topups and cross border micropayment services from one person to the other. Prepay Nation utilizes the prepaid mobile ecosystem to transfer values in the form of international airtime remittance. I got really excited when I came to know that there is no service charges to the sender or receiver and operates across European, US, India and other countries.

Currently, Prepay Nation’s platform is utilized by leading mobile operators in Latin America, Africa, the Middle East, and Asia. Headquartered in Pennsylvania, Prepay Nation is present in more than 27 countries with offices in Chicago, Illinois, New York City, Miami, Florida, India, UAE and Europe maintaining 200 mobile operator partnerships globally, and having a highly varied distribution footprint comprising over 150,000 retail points of sale.

Remitly

Started as Beamit Mobile in May 2011 by Matt Oppenheimer, the company changed its name to Remitly, a play on the word “remit”, which means to transmit money. Remitly has received a total funding of $5 Mn through investors including Mark Williamson, TechstarsFounder’s Co-opBezos Expeditions,TomorrowVenturesGeoff EntressSujal PatelChase Franklin  and Trilogy Equity Partnership. Remitly is licensed to operate in 18 states of USA (including California, Washington, and Oregon), and is currently focusing its marketing efforts on those who send money from the U.S. to the Philippines.

Click to see how Remitly works! from Remitly on Vimeo.

Remitly allows payment from different options like by using bank account, debit card and credit card. One can use bank account transfer for no charges by choosing three day service above transaction of $100. In case of cash pick-up delivery options, charges are as low as $0.99 to $1.99. In addition to communicating with customer via Email throughout the process, Remitly also keep inform the recipient via SMS. SMS includes the Reference Number for the transaction and details on how they may claim the remittance.

Mobile remittance is today allowed in most of the emerging economies such as Philippines, Bangladesh, and Kenya etc. where it has generated close to 85% of the transaction value last year.  How would countries such as India (US$ 71Bn, 2013E) and China (US$ 60Bn, 2013E) adopt to these technologies is to be seen. These 2 countries alone have a market share of 31% of the global developing countries remittance market which is estimated at US$414 Bn for 2013.

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Chiraag

Chiraag Patel is a Senior Reporting Analyst and the Editor of Bitcoin and Virtual Currency channels at Lets Talk Payments. He is an engineer with deep interest in MMORPG, Virtual Banking, Game Currency and Virtual Cash. Chiraag enjoys Reading & Blogging with focus on New Innovation, Technology & Startups in the Payments Space.
Twitter:@chiraagpatel21