This week: 150 Challengers & Incumbents, Alpha FX, Australian Competition Authority, Azimo, Finablr, Revolut, Western Union
Sign up yourself here.
View this email in your browser
New data, new insights on cross-border payments. Every week.

The future of the sector is at stake

Welcome back, we hope everyone had a great summer. 

We're going to kick things off with a massive mapping of the sector and the fight that is heating up between incumbents and challengers. We'll also look at the half year results of Finablr and Alpha FX who've both seen recent jumps in their share prices. And we look ahead to conference season.

To the sector as a whole...
In our mapping above, the challengers include the new FinTechs and startups formed in the last ten years. The incumbents form the rest of the mapping.

Ten years serves as a good marker to draw the line between the two groups:
  • The few years after the Great Recession saw hardly any new companies established due to tighter capital markets and little appetite for risk-taking in financial services.
  • Of the three most funded startups in the space, TransferWise and WorldRemit were established in 2010 and Remitly in 2011.
  • Technology - especially mobile - was entering a new phase ten years ago. The first iPhone had just been launched (in 2007) and smartphones use in the US was only starting to even be tracked (at less than one third of the population compared to close to three quarters now).
The incumbents' names you are all mostly familiar with. There are no banks in this analysis and with the exception of Revolut who started in international payments, there are no neobanks either. Our Top 100 mapping brings the banks.

The big takeaways:
  1. From a pure count perspective in our mapping, we see the industry as pretty evenly split between challengers and incumbents. Whilst incumbents still have more market share, the challengers for the most part are growing at much faster rates.
  2. The UK and the US still standout as the key regions where cross-border fintechs have been started and are growing from. We don't see Brexit as significantly changing this as most established players have simply setup small European subsidiaries to deal with the potential loss of passporting to the EU.
  3. Some of the incumbents in the chart are clearly sub-scale. They will either need to merge or be acquired to be able to withstand the competition from the challengers over the next five years. 
Download the incumbents vs challengers map

Finablr finds its groove

After a challenging IPO in May which failed to deliver the valuation Finablr hoped, the company announced its first set of public results over the summer for the period Jan to June 2019. The results were encouraging - overall growth was up 9% and EBITDA up 27% (H1 2019 to 2018). 

Also encouraging were the increasing or stable margins across the business. Although the travel money segment shrunk in size, it has been rationalised to be a more profitable business line. 

It's still early for the public adventure for Finablr but IPO shareholders will at least be happier now than they were four months ago.

Track the Cross-Border Payments Sector

Alpha FX shows the profit in corporate

Alpha FX, the corporate-focused FX and payments provider published its half year 2019 results yesterday. Top line growth was especially strong at 60% year on year. 

We were also given some insight into where the business is going with the re-positioning of their payments business from Alpha Pay (mass payments) to Alpha Banking Solutions.

Alpha focuses on medium sized corporates and institutional clients and serves a much smaller number of clients than many of its competitors (565 as per this latest report) but does so at envious margins.  

The Institutional business was only started in March 2018 and profitability has already jumped. We expect to see more from Alpha as the business continues to expand.

To map your corporate pricing versus the competition, get in touch.

Need data via APIContact us to get ahead.

Get the best FX pricing data in the industry

Conference season in full bloom

Conference season starts up in a few weeks. We'll be speaking at Money20/20 in Las Vegas and the IAMTN in London and we'll also be at Sibos at the end of the month.

More on these to come but as calendars book up, please schedule a meeting with us: 

Let's meet at...
On our radar this week:
Curated by FXC Intelligence's Team 
Azimo has a new CEO

Richard Ambrose is promoted as Azimo announces it has broken even
The Aussie Govt reports on FX pricing

Confusing (and high) pricing and a lack of robust competition in the market
Australian Competition & Consumer Commission
Western Union leaves San Fran

WU decides to close it SF digital hub as part of its cost cutting
San Francisco Chronicle
Revolut heads to the sun

Revolut opens a big operations center in Portugal as it hits 7m customers

Missed the last few weeks?

Inside the turnarounds at Western Union and MoneyGram (here)
Mastercard and Visa are taking on the sector (here)
Hidden strategies in cross-border payments M&A (here)
Was our newsletter forwarded to you? Sign up here
Have a great week,

Copyright © 2019 FXC Intelligence Ltd, All rights reserved.

New York | London

Subscribe to this newsletter

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list