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This week - Chipper Cash, Finablr, Monzo, N26, Revolut, PagoFX, Starling, TransferWise, Travelex, Western Union, Whatsapp
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New data, new insights on cross-border payments. Every week.
 
Our newsletter is proudly independent and read by thousands of the leading organisations in cross-border payments around the globe. Feel free to share it. 
Cross-border payments for businesses are a commodity service. That's why we are seeing deeper and broader product offerings coming from the fintech space to win corporate customers. We look at that first.

You'll also find us in the press this week. The Economist utilised our pricing data in their article on remittances. We also published our latest Forbes column covering the potential issues of the reported Western Union acquisition of MoneyGram. We highlight one aspect of that around pricing premiums below.

And finally, we provide an update on Finablr and its difficulties selling its Travelex brand.

Doing more for businesses

Off the back of Santander's PagoFX announcement this week that it opened up its services to UK sole traders and N26 launching a new premium business account, we take a look at how the digital banks are building their business offering as they look to expand. 
 

Cross-border payments are a commodity capability for digital banks in Europe and the UK, with players like Revolut and Starling providing their own direct service, and N26 and Monzo white-labeling TransferWise. This is not the case everywhere though. In the US, the biggest players such as Chime and Varo lag behind in their adoption of cross-border capabilities. 

As businesses become more digitised, digital banks are integrating third-party services into their apps to create platforms that provide a solution for more and more business needs. Players like TransferMate, Veem and Bill.com who are focused on the SME payments segment, are already providing solutions that put together cross-border payments, data management and accounting tools.

With Open Banking expanding among digital banks in Europe, we will likely see ecosystems growing, with these players increasing their business offering through partnerships. In the US, however, we might not see the digital banks follow unless European players bring these capabilities along as they expand.

Still, is building a technological ecosystem enough to attract profitable customers? Probably not until you are able to offer services such as loans or working capital financing, which can be essential for smaller companies. Partnerships with incumbent banks might be the solution to this problem. Expect to see more in the coming months.
Get access to the best B2B pricing data in the industry

Western Union's pricing premium

In our latest weekly Forbes column, we look at the issues around Western Union's reported possible acquisition of MoneyGram. The economics of the deal look good for both parties but could antitrust issues stop the deal?

One clear area of opportunity, but also potentially a deal blocker, is the pricing power Western Union may obtain along key corridors and into key markets.
With such a significant proportion of currency corridors where Western Union prices above MoneyGram, a deal would provide Western Union with several interesting options:
  • Remove MoneyGram as a competitor in a corridor to either further protect its current pricing or even increase it.
  • Continue to run MoneyGram as a lower cost brand and maintain a price premium for Western Union.
Especially in parts of the cash-to-cash market, both Western Union and MoneyGram often dominate the market. Would this be enough to rouse the antitrust bodies or is there still enough competition from the new digital players? Dig into this in our column...
What Could Stop Remittance Giant Western Union Acquiring MoneyGram

What next for Finablr's brands?

Travelex
Finablr issued a statement this week that no acceptable offers were received for Travelex. For a brand that has been around for 40 years, this is a sad state of affairs. Travelex currently has considerable debt. For now, the debt-holders have given it an additional window until July 2nd to come up with a solution to move forward. Travelex owes €360 million in debt to bondholders and has a revolving credit facility of €90 million.

UAE Exchange
The remittance arm of Finablr appears to be emerging from some of the recent difficulties. Reports have emerged of some customer refunds being made and the company has started to offer pricing on its online transactions again. The company still remains under the control of the UAE Central Bank and firms such as TransferWise, who have recently launched in the market, will be benefitting from the market incumbent running far under capacity.
 
Where does Finablr sit in the Top 100 Players in the Market
On our radar this week:
Curated by FXC Intelligence's Team
Whatsapp launches Brazil payments
Facebook's WhatsApp brings digital payment to users in Brazil. Expect this to be the beginning.
Reuters
The impact of Covid-19 on remittances
Covid-19 has squeezed migrants’ remittances to their families. But the boost the digital has been a positive.
The Economist (FXC Intelligence data)
Chipper Cash raises $13.8m
The San Fran based P2P player raises its Series A to tackle the African market. This may be one of the final frontiers.
Techcrunch
Western Union and MoneyGram
Will anti-trust issues stop the reported deal from happening and what could happen to the MoneyGram brand.
Forbes (FXC Intelligence column)

Missed the last few weeks?

What to make of Revolut's recent price changes (here)
Which companies will emerge strongest from the pandemic (here)
The volatile state of remittance flows (here)
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Stay healthy and stay safe,

Daniel
Copyright © 2020 FXC Intelligence Ltd, All rights reserved.

London New York | Washington DC

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