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This week: Alipay, Bo, Finablr, MoneyGram, NatWest, Ripple, Paytm, Singapore, Softbank, TransferWise
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New data, new insights on cross-border payments. Every week.
 

Last week we looked at the impact of big tech on cross-border payments. This week, we zoom out and analyse some of the macro trends driving the sector, focusing on cross-border card and e-wallet payments. We also dig into pricing trends in Singapore and look at Ripple's additional $20m investment into MoneyGram. 

PS: Happy thanksgiving to all our American readers. So as not to disturb your turkey dinners, we're out one day early this week.

What's driving cross-border card payments?

Payments by cash and bank transfer is one side of the cross-border money transfer market. The other is card and electronic wallet payments. Our insights below are for the largest economies where consistent, comparative data is available.

There are many payment companies entering the space and others launching new products to better serve the cross-border needs for card and e-wallet transactions.  

What's driving the sector?

Overall growth in card payments is driven by the general shift away from cash especially in Southern and Eastern Europe (e.g. Italy, Russia and Spain are very cash-reliant economies) and developing countries (e.g. Indonesia). In countries such as the UK and the Netherlands, card usage is reaching a more mature stage.

Why is cross-border payments growth slower than overall card payments growth?
We see a number of factors:
  • The relatively high costs of using a card internationally versus domestically, driven by a range of FX and cross-border fees (with a large variances in these costs across cards, issuers and countries).
  • As the acquiring market is highly fragmented, it is difficult for customers and merchants to have fast and broad access to international payment systems. 
  • Cross-border card payments is also highly linked to e-commerce growth - slow growing e-commerce markets have slower growth in cross-border card payments.
What are the implications?
  • Regulations that help to reduce the cost of card payments abroad may make card usage more transparent and faster and this may drive growth (e.g. the EU Cross-Border services law) . 
  • We'd expect to see more investment by fintech players into the high growth markets such as Spain, Italy and Russia to serve the growing demand.
  • There are network effects from digital payment/wallet adoption. Venmo in the US has over 40 million users and as scale and options grow in other markets (e.g. Revolut), the usage of these payment methods will grow. 
We track the pricing of many thousands of cross-border payment cards across the globe. To use this data to drive your strategy and pricing - get in touch.
Dig into data on thousands of cross-border cards

Competition heats up in Singapore

Last week we looked at payment competition in the UAE, where both banks and domestic exchange companies have a significant presence. This week we're highlighting Singapore, an increasingly popular market where customers can receive competitive margins from banks or payment companies even for remittance-level transfer amounts. 


Unlike the UAE, there are already multiple global payment companies operating in Singapore (see the leading players here). As can be seen from the data, however, low pricing alone may not be enough to distinguish themselves in this market. 

Get the best pricing data in the industry

The latest investment in MoneyGram

We recently analysed the most volatile public company payment stocks. Top of the list was MoneyGram.

This past week, Ripple invested a further $20m into MoneyGram completing its planned $50m investment. Ripple now owns just under 10% of MoneyGram. 

Although the price of Ripple's investment per share was just over $4, the market, which keeps changing its mind on MoneyGram, doesn't agree with this value yet. Recent news has been more positively received for MoneyGram with the stock picking up - will this continue?

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On our radar this week:
Curated by FXC Intelligence's Team
Finablr's next big remittance partner
Finablr becomes one of the first cross-border remittance partners for Alipay
Finextra
 
Natwest launches its digital bank Bo
Bo uses Natwest's license and focuses on spend tracking and a pre-paid card
Yahoo Finance
Paytm reported to have raised $1bn
Troubled Softbank and Ant Financial invest in the Indian payments firm
Reuters
TransferWise launches in Malaysia
The fintech's push into Asia continues. 
(See why in our Malaysia pricing data)
Crowdfundinsider

Missed the last few weeks?

How big tech will impact the sector (here)
Private equity's cross-border payment strategy (here)
Why Santander bought Ebury (here)
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Have a great week and happy thanksgiving!

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

New York | London

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