Mobile money transfers: what’s new?
The mobile payment boom has ushered in a new era of innovative fintech startups. Most recently, London-based WorldRemit made headlines by raising $45 million in financing in a bid to boost its mobile-to-mobile money transfer service. It's already processing over 100,000 mobile transactions a month, and disrupting the international money transfer market for big players like Western Union – here's why.
WorldRemit: why the buzz?
80% of WorldRemit’s revenue comes from outside the UK, mostly from Canada, New Zealand, and Australia, while Latin America, Asia and – above all – Africa make up the markets most money is sent to. The app has local partnerships with money services in each territory it operates in, giving the sender freedom to choose how to make the transfer – as a bank transfer, cash pick-up, airtime top-up or mobile to mobile. It’s this flexibility coupled with low costs that’s making the startup an appealing option for those sending money abroad.
How are traditional money transfer services responding?
Western Union has since announced a partnership with mobile messaging service Viber. The partnership allows US-based Viber users to send up to $499 through the messaging service for pick-up at the receiver's nearest Western Union office, available across 200 countries. However, the physical element of the service could be an unwanted hassle for those who are used to doing everything online.
What’s next for mobile money transfers?
Some fintech startups are exploring charitable ways to use the technology. For example, non-profit Stellar is working with Oradian, a fintech service provider, to facilitate cashless money transfers for rural women in Nigeria. Despite being Africa’s largest economy, the majority of Nigerians don’t have bank accounts. The technology is used by microfinance institutions (MFIs), which offer small business loans within these communities, to safely transfer money between their own branches as well as to customers.
Is mobile money transfer safe?
Most mobile money transfer apps use encryption (the transformation of your personal data into nonsensical and unreadable chains) and Transport Layer Security (TLS) or Secure Sockets Layer (SSL) for security. Both TLS and SSL prevent third parties from eavesdropping on communications between you and the server. Elsewhere, blockchain technology is being touted as the next big thing in personal data security.
As mobile international money transfer become more popular, the likelihood of security breaches could increase. Check out our blog to find out how to keep your your payment information safe. In the meantime, be sure to use The Money Cloud's trusted, FCA-authorised brokers for a secure way to send money abroad.
