International money transfer is on its way to becoming a contactless workflow. It’s still early in terms of adoption, but the handwriting is on the wall.
Sramana Mitra: Let’s have you introduce yourself as well as Remitly to our audience.
Matt Oppenheimer: I’m the Founder and CEO of Remitly.
Sramana Mitra: Tell us about Remitly.
Matt Oppenheimer: Remitly is a mobile phone alternative to the offline cash-based system of sending money internationally. We started about five years ago. We send over a billion in annual transactions which makes us the largest independent digital money transmitter in the US. We’re growing very rapidly. We grew about 400% year on year last year.
Sramana Mitra: The old player in the space is Western Union except they’re not mobile. Is that how you categorize the space? Can you give us a overview of the space?
Matt Oppenheimer: There are $588 billion in remittances that are sent every year. $435 billion of that goes from developed to developing countries, which are customers that move thousands of miles away largely with the purpose of having earning power, make more money, and build a better life for themselves and also for their loved ones back home. A lot of that money is sent via linking it to a banking account or a debit card.
On the receiving side, a lot of that is picked up still in cash, given that cash dominates a lot of developing markets. That’s a market we’re addressing. The vast majority is done offline still but it’s shifting quickly to digital options. In terms of traditional players, they’re trying to build digital solutions but we, being mobile and digital first, have the best product out there as evidenced by our growth rates and trajectory.
Sramana Mitra: Can you talk to us about the customer base that you are getting traction from? Of course, Western Union, being the incumbent, has a certain customer base. You must have found a specific customer base through which to penetrate the market at the pace at which you are doing so.
Matt Oppenheimer: What surprises a lot of folks is the vast majority of remittances that are sent between larger corridors. We send money from the US to the Philippines, India, and Mexico. If you look at the $134 billion that originates from the US, which is the largest market where money is sent from, the top five account for over half of that $134 billion. We’ve been very focused.
If you think about our customer base, it depends on the market. Let’s take the Philippines. The customer base is somebody who’s lived in the US for a long time – what they call Overseas Filipino Worker. 10% of GDP of the Philippines comes from remittances. Half of those originate from the US. Historically, a lot of OFWs in the US have gone to physical cash-based locations but what’s happening, increasingly, is folks have smartphones. They trust their smartphones for financial services.
It’s so much easier when they’re sitting on their couch on a Friday night talking to their loved ones who are thousands of miles away. Instead of going to the physical store the next day, they can just switch over to our app and send money within minutes back to their loved ones in the Philippines. First of all, it’s amazing what our customers go through in terms of their life story and life journey. Second, we have a tremendous impact on their lives by helping deliver on promises. We have a robust front and back-end system to enable this.
Sramana Mitra: On the receiving end, are people receiving the money on their mobile phones or are they receiving it on their bank accounts and they go access it from the bank account?
Matt Oppenheimer: It’s a mix. We have over 20,000 cash pickup locations. We have the ability to deposit into most major banks in these countries within minutes. It is a seamless experience whether it’s a bank account and you want the money fast and at an affordable price or whether you want to send money to be picked up via cash where the recipient gets a text message with a reference number and instructions to pick the cash from the nearest location. Customers have the option of choosing, depending on what they need.
This segment is part 1 in the series : Thought Leaders in Financial Technology: Matt Oppenheimer, CEO of Remitly