Exclusive Interview with Jeff Parker, Head of Payment Solutions at OzForex, on the Global Money Transfer Industry

USForex is part of the OzForex Group, a global provider of online international payment services for consumer and business clients. The OzForex Group has grown to be one of the world's largest foreign exchange companies, transferring the equivalent of over $69 Billion AUD worldwide. The company guarantees extremely competitive exchange rates and cheap transfer fees. Standard transfer fees that USForex charges is just $5 (USD) for transactions below $5,000, and transactions above $5,000 are free. For comparison, the same transaction through banks are charged around $40 to $50.

USForex is a US subsidiary of the OzForex Group and the LTP co-founder Amit Goel met Jeff Parker, Head of Payment Solutions at OzForex Group and Prince Ghuman, Director of Marketing, North America at OzForex Group, to talk about the company, their strategy and other interesting topics. Amit and Jeff had a long engaging conversation; here is the transcript of the some of the interesting topics covered:

LTP: Could you please tell about your global presence/operations and your plans to expand in the US and overall?

Jeff Parker: We started our business in Sydney back in 1998. From there we opened offices in New Zealand, UK, Canada, Hong Kong, and then the US (San Francisco) in 2012. For the last two years, we have grown strongly in the US, at around 100% a year. We are looking to accelerate our growth and there are a number of ways we are doing it. We have our core business, which is directed to consumers. We currently operate under the name USForex, but soon we’ll be rebranding the entire global business to OFX, a single name across all regions and markets. It is both good for the search engines and for the business to operate as a single brand. We have historically used Australia as our launch pad and our US customers are mostly expat Australians or native English people. We are looking to diversify that and we are doing much more direct marketing to the different segments within the US. To help us accelerate our US presence we will be focusing on acquiring partnerships. In addition to the core business focused on consumers we will also be focusing on B2B, collaborating with large corporates, banks, software providers in order to leverage their brands, customers base and marketing capabilities. That is a big shift in strategy for us.

LTP: In the remittance space, people are seeing a fusion with the mobile wallets. Is it something you have or you are looking at?

JP: Like others we're seeing a significant increase in the use of mobile. In August of this year we launched the world's first large-scale transactional app, which will let customers make international transfers in 48 currencies. The app has 24/7 global customer support, live rate alerts and it will allow repeat payments. At this stage we haven't developed a mobile wallet however that is a space that we keep a close watch on. The whole app experience was designed to be mobile-first and potentially down the road it can be a mobile wallet. Back in 1999 when we started it was purely an online business, one proprietary platform globally. There is no agency or cash involvement in transactions; it is bank account-to-bank account.

LTP: You have 150,000 customers doing high value transactions. KYC is probably much more important to get it right? Are you doing something different than other players do in that space?

JP: It's different depending on the geography and licensing. In some geographies, KYC requirements are different based on the size of transactions. However, we do the same comprehensive KYC and pricing for all our clients regardless of the amount transferred. It is online so we use as much as possible of our electronic verification tools to speed up the process. We are exploring how we can tailor the service model to meet the demands of customers doing smaller transaction sizes. We want the client’s experience to be as seamless as possible. And if client wants to transfer a bigger value, we will then request additional information.

LTP: How can small businesses use your platform? Tell a little more how is onboarding process happening, how do businesses start transferring money and what are the charges.

JP: From an onboarding perspective, you go online and fill in the registration form. For corporate there is some additional work required. It typically takes 24 to 48 hours to onboard a corporate customer. Once they are on board, they can book transactions themselves, so they can completely self-serve. All clients have access to 24/7 customer service. In terms of fees and transactions, we try to be very transparent and consistent with our pricing. With some of the clients, the bigger the transaction the smaller the fee. Some of our corporate clients work on a fixed fee basis. With some of the clients it is a $10 dollar fee (USD) if they transact more than $10,000, and no fee if less. The spread of the fees depend on currencies. In terms of the backend, the reason we do it so cheaply, is that we process around 4,000 transactions a day across currencies. We net aggregate those transactions. Some of the clients are buying dollars, some selling, so we combine those activities. We have around 15,000 small businesses as our clients. It's typically small businesses that are underserved by the banks, and we give them 24/7 service, quick onboarding and a self-service platform. That is a strong value proposition.

LTP: Is this market competitive? Given that there are other players around, like MoneyGram, Western Union, and there are new players, - Xoom, Currency Cloud offering open APIs, TransferWise.

JP: It depends. MoneyGram and Western Union are interesting examples. MoneyGram is much more in a remittance space and has stronger position when there is cash involved in the transaction. We actually have relationships with them is Australia and USA. Therefore, if some of their clients want to do account to account, they refer them to us. Western Union is operating in a low volume remittance space and higher end business solutions. We are operating between both of those. TransferWise, Zoom, - those are more in a low value space. In our space, competitors would be companies like Cambridge Global Payments, Afex, HiFX. The US market is probably the least competitive, because licensing is so hard. UK and Australia are very competitive markets however despite other participants our main competitors are the banks who still have the significant market share in all markets that we operate in

LTP: Let’s talk about the bitcoin and Blockchain. Have you looked at it and what are thoughts?

JP: We have looked at it and held multiple discussions with companies like Ripple. I think the concept of a distributed ledger is very real and there will be enormous opportunities and benefits to go forward. For us as a business it is going to be a good opportunity to collaborate with those types of businesses. I don't think we will ever get rid of a real currency, it will always be required. As a concept, however, it is very interesting. We are not doing anything specific in the space, but we stay in contact with those types of businesses as there is definitely an opportunity for us to partner with them. I do not think it will be impactful in the short-term, but in the medium-term may be.

LTP: You also went to Money20/20 conference. What was your goal there and what did USForex bring to the conference?

JP: We did not have any announcements, for us it was a focus on our B2B journey. We are now strategically focusing on B2B opportunities. We had a booth there and had multiple meetings with companies from different industries, in particular ecommerce, financial service providers, FinTech software providers. We are looking to develop an ecommerce platform, which allows merchants to sell internationally and repatriate funds to home country at much cheaper rates than current market players. With our global rebrand on the horizon and big plans in place for the US market in 2016 and beyond, the conference was a good place for us to be.