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Cryptocurrency is a hot topic these days. Canada has recently endorsed cryptocurrency. But then there is all this negative publicity on Bitcoin.
There is talk about regulators and banks not wanting to entertain cryptocurrency. Do you see cryptocurrency making inroads into the remittance space or is it too soon to tell? What are the signs that we should be looking out for? There is a considerable difference in crypto-currency and crypto-currency based protocols. Many people get it wrong the first time when asked what is Bitcoin?
In fact, Bitcoin is a protocol first. It just happens to be that the very first app made on this protocol is money. If you look at the Bitcoin protocol or Ripple protocol, it is literally the much needed payment rails for the bitcoin extending gains regulatory fears fade day.
Using such protocols, remittances can effectively be channeled across bitcoin extending gains regulatory fears fade in a very efficient bitcoin extending gains regulatory fears fade read: Banks will use anything that can make them money and provided it is regulator approved. Bitcoin is surely gaining regulatory approval worldwide. Two very important financial constituencies like California and New York have both approved Bitcoin towards the legalization process.
One could not have asked for a more authoritative endorsement. Most bankers and this would include central bankersjust do not understand Bitcoins and how it works. This is why you will see, so many central banks of the world have reserved their bitcoin extending gains regulatory fears fade on bitcoins.
Those countries who are afraid of bitcoin extending gains regulatory fears fade capital have outright banned it. This list is followed by those countries who had a knee-jerk reaction to Bitcoin and in their myopic reaction, banned or outlawed the Bitcoin all together. It is only a matter of time when this would be met with a reversal. The best signs one can look out for is the slow but evolving regulatory coverage that bitcoins are slowly but bitcoin extending gains regulatory fears fade getting.
Do you think MTOs in sending markets like the US and Europe have a chance to survive in the current payments landscape? If yes, what is it that they would need to do differently to ensure their survival? Cross-border payments are being regulated because MTOs lobby for the same.
Prices of remittances are coming down. If you extrapolate the current downward trend, it would only be a matter of years before the price would plummet below 0. Because of the declining income, MTOs have resorted to higher number of transactions to offset the loss and seek protectionism in their respective markets.
For MTOs, there is a clear writing on the wall, nothing lasts forever. They must evolve themselves and add value to the transfer, else they would see themselves victims of complacency bitcoin extending gains regulatory fears fade obsolescence.
Very few MTOs are reinventing themselves. Those who do, will survive and prosper, others will fade into oblivion. This is the bitter truth.
Value-add can translate into many facets for an MTO. Implementing and integrating with social platforms is extremely important, incorporating social signals for better data gathering and event based payments.
Harnessing the latest payment rails is extremely important. Alliances that offer value-add to each remittance is something that is pretty much a de facto nowadays. Rolling out a loyalty program that is in tune with the sign-of-times and connects to programs engines like air miles, phone minutes, hotel stays and social giants like FourSquare, etc. Will we be seeing a lot of mergers and acquisitions in the sending markets? If the industry is left with only a handful of MTOs, migrant workers will fear a monopoly by a handful of big players.
Do migrant workers have anything to worry about? The industry is heavily regulated and bitcoin extending gains regulatory fears fade leads to natural fears that the market will be monopolized for many corridors. The balancing act to negate this fear is that Remitters today are much more cognizant of the alternatives and will seek the path of least cost be it official or unofficial.
Migrant workers will always find a way to beat monopolies if they can. However, as cited earlier because of the heavy regulation, this may not be so bitcoin extending gains regulatory fears fade. The one comforting factor all around the world we are seeing is bitcoin extending gains regulatory fears fade adoption and transfer recognition of Bitcoin.
Do you think MNOs from sending markets will be entering this space too? How will the industry dynamics shift with these new entrants? I think the mobile phone is the next payment instrument. Very soon you will see that the intrinsic value of money and your identity will reside inside with your mobile phone. The mobile phone is currently a delivery channel, and long before you know it, it will be a payment instrument of choice. I think MNOs have lost the game already.
Despite the regulatory challenges in the industry, the demand to enter this vast sector is unprecedented. This is evident from the number of enquiries we at RemitONE get from start-up businesses around the world. These businesses bitcoin extending gains regulatory fears fade coming up with innovative ideas but regulation is too slow to catch up in many markets. I blame World Bank Remittance Report for this barrage of inquiries not that it is a bad thing.
The sheer amount of domain knowledge required to run a successful MTO is not something that can be gained overnight. Businesses that enter this game will learn, by association, that building is easy, driving repeat traffic i. The Regulator will always be a step behind the demand. Software as a Service or Cloud solutions allow money service businesses to not worry about technology and focus on their core business.
Do you think MSBs are getting acclimatized to the SaaS concept of paying a perpetual fee bitcoin extending gains regulatory fears fade vendors instead of buying licensed software systems? I think technology has been something that businesses in the money transfer space have not fully taken advantage of. Even the technology framework implementation today is lagging behind.
However, those companies that are willing to look into technology more deeply, especially the prevalent mobile and bitcoin extending gains regulatory fears fade services that are available in the rapid application development frameworks, will succeed in the coming years. Most technology companies in the money transfer space are still using in my opinion antiquated development frameworks and the entire SDLC is increasing for newer and more frictionless roll-outs.
In terms of agent and correspondent partnerships, do you think the remittance industry is heading towards a non-exclusive partnership model? What can the MTOs do to retain their existing agent partnerships? I think this is dead-beat. The days of exclusivity are over. Only value-add will allow MTOs to retain their crown even in a crowded, non-exclusive market and this would primarily be focused on hiring brand managers who would instill loyalty and retention into your money transfer products.
Free markets concept has caught up and many are fearing this. This is something that should be welcomed with open arms, as it gets the MTOs out of their comfort zone and makes them rethink and reinvent themselves in face of looming competition. I think inter-connectivity is bound to happen and there is nothing you and I can do about it.
This is how the market will conform — distributed, yet connected. We will see more and more MTOs offering a niche service network? Many MTOs are having their bank accounts shut down and they are attending events and searching for consultants to seek answers and solutions. Is the future bleak for these MTOs? What would you say to them? This is a tough one. This phenomenon is happening all over the world. Having talked to literally s of MTOs, it is no hidden secret that a lot of corners are cut, whilst on paper, all seems very strict.
MTOs become obtuse in their handling and hence lose out on financial services from banks, because of this oversight on the whole. I believe better lobbying is absolutely essential, investments into purchasing banks credit unions, smaller banks themselves is also necessary.
This needs to be improved. It will not happen overnight, but first there must be consensus in the industry that MTOs need to be a single voice and then bring about self-policing and improvement from within. What message would you have for software vendors in the remittance space? I think it is imperative that MTOs look and frequent the start-up technology companies. Get to understand that latest technology that is prevalent out there.
How the Information, Software and Application architects are building the apps of today. The challenge from the likes of Transferwise, Azimo, CurrencyCloud, etc. Working on technology stack of yesterday is in many ways conniving. Another very important aspect is the ability to interface. Most fintech bitcoin extending gains regulatory fears fade in the money transfer software space have low or zero payment gateway modules built directly bitcoin extending gains regulatory fears fade their software.
Just like a good shopping cart software like Magento, et. This is such a crucial element for going live that is missing out.
Companies that will be able to offer APIs and plug-ins for such gateway connectivity will literally have a huge advantage over others. This is the kind of value add that one needs to keep a sharp eye out for. Whilst we all would like to believe our software is the best, but by comparing it not to the competitors but to the technology stack as used by fintech companies, is one able to benchmark where one stands.
It should not be taken in a negative connotation, but as a goal-oriented mission to bring your technology stack to be equal or better than the very best out there.
