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This week: Bank of England, Curve, Euronet, Finablr, N26, OFX, PayPal, Remitly, Varo, Xoom
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New data, new insights on cross-border payments. Every week.
 

From Hong Kong to Seattle

Last week Remitly announced its giant $220m funding round. I spent some time this week talking to CEO Matt Oppenheimer about where Remitly goes next. More on that below.

As we're just over half way through 2019, we also look at the stock market performances of nine publicly listed cross-border focused companies. 

First though, we're excited to launch our pricing data for the Asian market. First up to share with you this week - Hong Kong...

The chart above is a sample of our newly launched Hong Kong pricing data showing total cost for the same sending amount in different corridors, ranging from the least competitive to the most competitive. As can be seen, costs for the same sending amount vary significantly in all corridors.

Licensees get all the numbers and can see each individual bank.

Do you have all the Asian market data you need?


Need data via APIContact us to get ahead.

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To Remitly - it's all about building trust

Remitly was founded in Seattle in 2011 and instantly took a different approach to growth by just focusing on one segment (US to Philippines) and one state and scaled up from there. Its annual flows are now tracking north of $6bn/year and it has served over a million customers.

Remitly's recent raise catapults it into the top three in our chart putting it alongside neobank N26 who announced today another $170m raise. What did Matt, Remitly's CEO share with me?

On raising $135m equity
It's all about expanding into key markets and developing new products...

...which means new financial services ahead.
What are the other pain points Matt identifies beyond remittances: Anything from insuring against specific risks of immigrants, lending without a credit history and getting bank accounts, all without the history and documentation that standard banking requires. We'd expect to see a very focused roll-out of the first of these products by Remitly, likely to one or two segments just to begin with.

Instant payment still needs working capital
Many companies, especially in the blockchain space, are trying to remove the need to pre-fund. But as Matt says, the devil is in the detail and as yet the solutions are not there for Remitly. Hence $85m for a credit line as part of the recent raise to ensure that instant transfers can be delivered, a key remittance product differentiator for Remitly.

Building trust is the cornerstone of the business
We talked a lot about the shifts from cash to digital and what it would take to move the many, many millions of customers over to digital. Technology (i.e. smart phones) are now effectively enabled and widely available - this wasn't the case 10 years ago. As customers increasingly trust using a mobile phone for financial services, that should enable the shift to digital, especially on the sending side. But, there is no silver bullet here.

On Facebook's Libra
The scarcity of details make it hard to draw too many lines but the even scarcer amount of information on the Calibra wallet is the really big unknown. Facebook will want people to use the wallet and pay in and out of their wallet. Matt's question - how will Facebook get money into the wallet?

My broader question - does the remittance customer actually want a [Facebook] wallet. Cash (both in and out) remains a fundamental requirement in the sector that is shifting but it's taking time.

We covered a lot of other ground the in the discussion and where Remitly has been successful to date. You can read Matt's insights in our report accessed below:

Access the full interview with Remitly's CEO

Taking stock, from Euronet to OFX

There are still surprisingly few public companies where cross-border payments is the primary or critical element of the business. Finablr (owner of Travelex and UAE Exchange) and Argentex IPOed over the last few months and are now included. How has this group performed in 2019 so far?

The first important takeaway is there is no single strong tailwind pulling the whole sector up. Some companies have outperformed the industry benchmark S&P 500, others haven't.

Second, for those who are performing well, they are all at or near their highs of the year. What will happen in the second half of the year?

Will Brexit, Libra or politics scupper or drive further growth in values?
Which public companies make our Top 100 Cross-Border list?
On our radar this week:
Curated by FXC Intelligence's Team 
Xoom officially launches in Europe

PayPal's Xoom pushes into 32 markets across Europe 
Business Wire
Curve raises $55m

Data privacy concerns aside, another consolidator app pushes on
Finextra
Varo raises $100m

The US neobank also refiles its FDIC application
American Banker
Bank of England Governor on Libra

Some rare positive signals on the project and helping the unbanked
Youtube

Missed the last few weeks?

The need for speed in cross-border payments (here)
Do Moneycorp, Revolut and InstaReM need banking licenses? (here)
What is driving valuations in the sector and who are the hot IPOs? (here)
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Have a wonderful week.

Daniel
Copyright © 2019 FXC Intelligence Ltd, All rights reserved.

New York | London

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