According to the World Bank, over $350 billion is transferred from developed to developing countries each year. Remitly is a digital service for international money transfers that delivers payments from a person in one country to another quickly, securely and at a lower cost. It eliminates forms, agents, extra time and fees tied with traditional money transfer process by using latest technology and mobile devices.
Started as Beamit Mobile in May 2011 by Matt Oppenheimer, the company changed its name to Remitly, a play on the word “remit”, which means to transmit money. Remitly has received a total funding of $5 Mn through investors including Mark Williamson, Techstars, Founder’s Co-op, Bezos Expeditions, TomorrowVentures, Geoff Entress, Sujal Patel, Chase Franklin and Trilogy Equity Partnership. Remitly is licensed to operate in 18 states of USA (including California, Washington, and Oregon), and is currently focusing its marketing efforts on those who send money from the U.S. to the Philippines.
Oppenheimer started Beamit in Boise, Idaho, but relocated the company to Seattle after getting accepted into TechStars. He says” I came up with the idea while overseeing mobile and Internet banking for Barclays Bank Kenya, helping them implement a new mobile banking strategy”.
During his time in Kenya he came to know about a family who lived in one of the slum of Narobi and problem faced by them because of unavailability of bank account. The requirement of money was not much but transferring it for the education of their kids was major problem. At that time he discovered, how challenging it was to receive money transfers in some developing countries. As Kenya is small market, Matt Oppenheimer decided to start in the Philippines. Oppenheimer said that roughly $7 billion is transferred annually from the U.S. to the Philippines.
This is a video showing how Remitly works:
Remitly allows payment from different options like by using bank account, debit card and credit card. One can use bank account transfer for no charges by choosing three day service above transaction of $100. In case of cash pick-up delivery options, charges are as low as $0.99 to $1.99. In addition to communicating with customer via Email throughout the process, Remitly also keep inform the recipient via SMS. SMS includes the Reference Number for the transaction and details on how they may claim the remittance. Three guarantees given by the company are:
- The best deal in rates and fees or money back.
- Delivery on time, or money back.
- 100% Satisfaction or money back.
Remitly charges $2.99 for money transfers up to $1,500 which is drastically lower than many competing services. The company recently announced pricing for its new international money-transfer service to the Philippines which allows one to transfers money of more than $100 for free-if he/she is willing to wait three business days. If the money needs to be wired immediately, it will charge a flat rate of $4.99 or less. The company said that it has transferred “millions of dollars” to date with transaction volume up 200% in the first quarter of 2013.
The company faces competition from banks and other money transfer firms. Its main competitors are Western Union, Moneygram and Xoom which are well established and situated at almost all the countries. But these companies charge high fees. For example Western Union charges about $15 on a $200 money transfer for the Philippines. Another startup CoinFling focuses on Africa, specifically Kenya, and its “mobile centric money transfer service” has already generated huge support from the immigrant community in Seattle. Firms such as Pangea, Ripple, Regalii and Transferwise (profiled by Lets Talk Payments) have also made their presence felt. You can read Lets Talk Payments report on Remittance Business boom: Latent opportunity for the Mobile Play.
LTP View: While well established and multi-location international money transfer firms like Western Union, Moneygram and Xoom have benefit of transferring huge amount yearly and tie up with big retailers like Walmart, they charges more as transaction fees and take longer time to deliver, which give lead to organization like Remitly which works on model of less transaction time and lower fees. But these bif firms are also enjoying the maximum share of the world market which is around $350 billion and Remitly is still only working in USA and Philippines. It is time to take a leap and target more potential countries because other start-ups like CoinFling are in the queue to eat the potential market rapidly.