Sramana Mitra: Is there a demographic categorization where you’re winning more? Is there an income bracket or are you seeing it more in an age group? What I’m trying to get at is which part of the population is adopting this kind of mobile money transfer?
Matt Oppenheimer: There isn’t just one segment of age or income level. If you think about folks who live in the US, almost everyone has smartphones now. I would have initially thought it would just be the younger demographic using the service, but it’s a wide range of ages. It’s not just one segment that’s shifting to digital. Everyone is using those smartphones and trusting them.
Sramana Mitra: What are the trends that you see in your work that are worth discussing?
Matt Oppenheimer: People often forget that the iPhone was invented in 2007. Right when the iPhone and Android were invented, our customers were not always the first adopter. What’s happening now is customers not only have smartphones on the send side but they’re increasingly trusting those smartphones for financial services. As that shift occurs, I think that it’s really exciting for customers. It’s really exciting for companies like ours that are delivering that solution.
I think that folks often forget that trust hurdle is the paramount concern for a customer when they’re thinking about an option to send money thousand of miles away. It’s good to have a lower fee. It’s good to have a lot of the things that we do from a product perspective. All those things equate back to building trust with consumers. The macro thought leadership is it’s easy to forget that that trust has only actually been recently built. It’s massively shifting that way because people have smartphones right now and they’re trusting them for financial services.
Sramana Mitra: What are some of the open problems that you see in your space that would be worthwhile for a new entrepreneur to look into?
Matt Oppenheimer: Especially for readers internationally, recipients don’t all have smartphones yet. Not everybody in Mexico, Philippines, or India has a smartphone. They are increasingly getting smartphones and they will also go through that curve of trusting that smartphone with financial services. There’s an enormous amount of opportunity to build digital products leveraging smartphones and the relationship that customers can have with digital products and business like ours on the receive side.
Sramana Mitra: Are there regulatory hurdles?
Matt Oppenheimer: Yes. We’re a licensed money transmitter in all the US states. We have built out a lot of compliance systems. If you get it right, there’s a huge amount of value that can be created for the customer and the business.
Sramana Mitra: The question I was asking is in the developing countries, there are more regulatory hurdles than in the US on this front?
Matt Oppenheimer: I wouldn’t say more. I’d say different. In the US, getting a money transmission license in every state is one of the most difficult processes out there. In developing countries, they’re all very different. I would not say it’s necessarily more difficult. I would say that it’s equally important.
Sramana Mitra: Anything else that you want to share?
Matt Oppenheimer: Nothing that jumps to my mind. We talk to some of our customers. The cool thing about this business is the impact we can make in our customer’s lives. Every business should add value to their customer’s lives, but our business has a unique opportunity to serve an industry that has traditionally been underserved and therefore create a huge amount of value in our customer’s lives.
Sramana Mitra: What percentage of the money transfers now are happening through this mobile channel?
Matt Oppenheimer: It’s hard to get an exact number on that. I think that it’s a relatively small percent globally but if you look at each market, each market is going to be different. The overall direction is it’s relatively small globally with some markets being much more digitized than others. If you look at the growth rates five years out, there are going to be a few big businesses with ours being the largest that emerges as global remittance company.
Sramana Mitra: Great. Thank you for your time.
This segment is part 2 in the series : Thought Leaders in Financial Technology: Matt Oppenheimer, CEO of Remitly