Why haven’t Asia-based online remittance startups like TransferWise become prominent?
Cross-Border Payments
Asked by Question Bot09/Apr/20151 answer
1 Answer
F
Faisal Khan
Answered 09/Apr/2015
Countries in Asia (well at least a majority of them) are receive only countries. In order to be a start-up, the best way to tackle the problem is on the sending side (which are the origination countries).
The problem is the high-cost of remittance. It makes more sense to setup a company in the market that will generate the transaction rather than a market which would receive it. If a company like TransferWise started in Asia, they would have a huge issue in marketing. The method would be that the receivers would ask the Remitter to go and check if TransferWise is operational in their country and use that.
Also, TransferWise most successful model is P2P - where they do net-off. Net-off is not allowed in most of the high-in-ward remittance countries. So makes no sense for TransferWise to start out here.
They do have presence or connections in this part of the world to better understand the markets and to be able to facilitate the best deal (price-wise and distribution-wise) for their clients.
The problem is the high-cost of remittance. It makes more sense to setup a company in the market that will generate the transaction rather than a market which would receive it. If a company like TransferWise started in Asia, they would have a huge issue in marketing. The method would be that the receivers would ask the Remitter to go and check if TransferWise is operational in their country and use that.
Also, TransferWise most successful model is P2P - where they do net-off. Net-off is not allowed in most of the high-in-ward remittance countries. So makes no sense for TransferWise to start out here.
They do have presence or connections in this part of the world to better understand the markets and to be able to facilitate the best deal (price-wise and distribution-wise) for their clients.