Mobile payment service providers are eyeing the highly lucrative remittance industry to drive growth

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Global mobile remittance market which stood at USD 857.6 billion in 2016 is expected to reach USD 4,208.8 billion by 2021. Over the years, despite being a huge industry segment, very few players have ventured into this arena. However, in recent times, mobile payment providers targeting this segment by partnering with money transfer service providers.

• Online and mobile financial service provider Ant Financial Services Group, which is an affiliate of e-commerce conglomerate, Alibaba Group, acquired MoneyGram, the second largest remittance service provider in the United States. The deal was sealed for USD 880 million and is expected to close in second half of 2017. MoneyGram will continue to sustain its brand name and headquarters after completion of the process. Currently United States ranks 1st in terms of remittance globally. MoneyGram is licensed for money transfer services in 53 states of the country as well across 200 countries worldwide. Hence, Ant Financial Services Group will gain access to this licensed service for a profitable business expansion at one go, which would have taken significant amount of time if individual license had to be acquired by the company for every single state and other countries. With this venture, the company will also gain access to 2.4 million bank and mobile accounts of MoneyGram, in addition to its own 435 million customers. MoneyGram on the other hand will have better financial support towards investment in innovation in terms of mobile and online services with this acquisition for competing with world leader Western Union.
• Another similar venture that occurred last year was acquisition of digital remittance company Pay2Global situated in UK, by payment network firm TerraPay, owned by Mahindra Comviva. Pay2Global holds right of money remittance into UK and European Economic Area (EEA) which includes 32 countries. Following acquisition, Pay2Global was rebranded as Terra Payment Services (UK) and TerraPay plans to extend services to Asian and African region as well in coming years. TerraPay aimed at building global payment infrastructure for low value cross border transactions interconnecting mobile wallets, financial firms and money remittance service providers through this venture. This acquisition will benefit TerraPay and Pay2Global towards business and market expansion for stable revenue generation in coming years.

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