How businesses are disrupting the Remittance industry
Remittance is the source of hope for scores of people who have family members living abroad. More often than not, there is a family back home patiently waiting to receive money for every hard-working person toiling abroad to earn a living for himself as well as his family. It is that which ties one's duty to another's need.
Remittance is also the cornerstone of many economies worldwide, especially for developing countries, where it is a lifeline of sorts. It has been carrying capital flow of FDI throughout history and it is only growing. Today, remittance is a $700B industry and it is projected to grow up to $930B by 2026.
The million dollar question is 'How can your business have a piece of that $930B pie? The answer, embed remittance-as-a-service into your current business.
Remittance by definition is to send money from point A to point B while crossing states, countries, or even seas. Your business does not have to be a cross-border payments business to be a part of this multi-billion dollar industry.
Whether you are an e-commerce business, money service business (MSB), money transfer operator (MTB), or any business that requires making international payments, you can build cross-border payment capacity. You simply need an international money transfer API to integrate this into your existing business.
This can be an easy adjustment if you are already thriving in the tech space. Here are a few businesses that have added Remittance as a Service (RaaS) and have done it right in the last years.
Digital Gift Stores offer remittance services
Imagine you have an online store where people purchase products for themselves, or maybe they buy gifts for someone they love. Your web traffic is pretty consistent. You have a great user base and know how many of them are buying from another part of the world. Yes, you’re profitable - but what if you add remittance as a service to your current digital store?
You are now giving your customers the option of sending cash as gifts in addition to the rest of the gifts in your shop. In fact this is exactly what Thamel has done. Thamel started off as an online gift store and it expanded to become a platform where people can also send money from the US to their families in Nepal.
They integrated an international money transfer API into their existing system at an affordable cost and added a whole new vertical into their product. This small change opened the avenue to make an additional six figures.
Fintechs offer remittance services
As long as your business is in the digital space, remittance is an option for you. Hamro Patro is a digital calendar/fintech of Nepal that helps you keep track of important cultural dates and festivals, send gifts and bill pay to families in Nepal, look at horoscopes and listen to podcasts.
Not too long ago, they decided to add remittance as a service to their current business model and offered the service to their existing user base. As their reach of Nepalese diaspora is already phenomenal, and this is the most successful diaspora Nepali app, which crossed over 10M downloads on Google Play Store alone, this additional feature was a big step in the right direction for them.
After embedding RaaS, they added a new revenue vertical in their existing revenue sources. Why wouldn’t anyone want to offer remittance as a service when it is the best move for the business right now?
Money Service Businesses (MSBs) offer remittance services
Say you’re already in the cross-border payment industry, you might as well maximize the outcomes by expanding to countries like the US. Providing these services for people from the US is a big deal for your digital money transfer business because it happens to be the country that sends the most money across borders. So, instead of just remitting from one state to the next or one country to another, why not scale up?
That’s exactly what PesaDirect Sendly, FirmPay, AideMoney, did and it was a game changer for them. For a local MSB, it has always been a challenge to expand their wings in multiple countries and multiple states, but using Machnet’s international money transfer API we turn their dreams into reality.
Online Marketplaces offer remittance services
Another opportunity you can look out for is if you are in the digital outsourcing industry or is an online marketplace. For instance, businesses like Hubstaff & BetterUp may potentially do well by adding remittance as a service. Online Marketplaces already have a fast growing user base that live in the online world, So if you are one of them, the process will be fairly easy.
If your business model would already capitalize on the diaspora of people working from all over the world, chances are, the same people working remotely will be sending their earnings to themselves, friends, families or vendors - wherever they may be. Right now, after collecting funds from your marketplace, they still have to first put funds into their bank accounts, then only transfer it through a third-party application. This causes delays in fund transfers as well as incurs more fees.
Now imagine empowering them to do all that within your marketplace? That will be a very good reason remote workers use your marketplace instead of your competitors’ who don’t have this service.
You don’t have to start from scratch or reinvent the wheel to be a part of this fast-growing industry. In fact, you don’t even have to be a remittance business at all. Remittance is an industry that will keep on growing alongside technological advancement, the quick-spread diaspora of people, and human evolution. The sooner you recognize this, the sooner your business can be a part of it.
Being a part of that $930B pie is much more than just about the revenue - it’s about making a positive impact on your country, and its citizens. Despite the demand, there aren’t enough players in the space offering remittance service through RaaS yet.
You could be that platform that provides remittance service for your community through RaaS. Instead of being dependent on an existing provider who charges exorbitant fees, why not build a platform and serve the community? And because you know your people better, you can listen to them and solve their hiccups by localizing that platform.
Allow your end users to request funds, allow them to attach a digital birthday card, allow them to schedule recurring transfers, and many more. The outcomes are countless!
And the best part? You can grow your business and expand your services without the hassle of doing so. All you’ll have to do is integrate your web app or website with Machnet’s international money transfer API that allows you to do this swiftly, seamlessly, and conveniently. Contact our sales team to learn more about how can build your remittance service and start offering it to your customers in six weeks.