International money transfer has grown to become a consumer market worth an estimated £400bn globally.
It has become a routine utility for many, resulting in a sharp increase in the number of businesses offering money transfer overseas. New entrants have successfully challenged the banks, which typically charge as much as 5% to 8% in remittance fees for the service – causing consumers to baulk at paying the high fees.
Global money transfer firm Xpress Money has compiled a list of the top six reasons for UK consumers to make international money transfers. They include emergency funding, one-off gifts and regular financial support for family and friends living abroad; fees and exchange rates for buying and selling overseas property; ensuring utility bills and other regular fees are paid while away from home; salary transfers; pension transfers; and emigration or relocation.
Sudhesh Giriyan, chief operating officer at Xpress Money, says that international money transfer has become part of day-to-day life. “Money transfer is a vital utility for families across the globe and the banks have failed to keep pace with demand.
“In many cases, funds being transferred are sent by low-paid workers seeking to assist family members in their native countries. Sums transferred are often relatively small and it is extraordinary that some businesses in our sector should be able to charge the fees that they do. It’s time for change.”
According to the company, innovation is driving the global remittance market. It cites recent research from Jupiter Research, which expects the number of mobile money transfers to increase by 150% in 2015 to more than 15bn.
Growth will be helped by new mobile platforms such as XOPO, which is scheduled to launch in the UK next month. XOPO will be a global platform that enables payments across social networks and messaging apps. The app charges UK users a flat fee of £2.99 (€4.20/US$4.50) on money transfers across popular social networks, regardless of the amount being transferred.
The European Banking Authority said that its proposed rules for stronger customer authentication would be relaxed for payments under €10.
A relatively small population and take-up of the latest technologies makes the country a testbed for payment innovation, according to an ANZ Group report.
The bank and the International Financial Corporation are continuing the eight years old trade finance partnership with a further investment.
“Corporate treasurers around the world are getting a better cross-border payments experience today,” announced the financial messaging services provider.