Gaining Traction in the Money Transfer Business

One of the biggest dilemma that fintech startups in the money transfer business face is gaining traction for their business.

A trainload of users will come, once we build it, they said. Usually it doesn’t happen.

At the end of the day, it is all about how many clients you sign-up and how many transactions flow through your system. Unless you have millions of dollars to spend on advertising, gaining traction is no easy feat.

Many of my clients in the MTO (Money Transfer Operator) space face this issue on a daily basis. The notion of “if we get just 1/10th of 1 percent of all transactions from the US, we would be set”.

Unfortunately, getting that 1/10th of 1% is no easy feat.

The remittance market behaves differently.

The white-collar market is very different in behavior than the blue-collar market.

The blue-collar market dominates remittances.

Gaining traction is not a simple formula, but a complex one (even if we don’t want to admit this). There are variables on the beneficiary country, there are variables in speed and transfers, and then there are variables of how the supply side of the market looks like.

Whenever challenged, I always say the following, think you have a nice product? Go and …

  • Sign-up 20,000 Nigerians in a year
  • Sign-up 35,000 Pakistanis in a year
  • Sign-up 100,000 Indians in a year
  • Sign-up 45,000 Filipinos in a year.

Just because you have a kick-ass mobile app, or use the latest Blockchain technology, etc. does not mean that users will adopt your offering and let go of their current provider in a snap. Just doesn’t work this way.

You actually have to go to the street level, interact, learn, discover, educate, be educated on how they function before you can rally your campaign.

Consumers will gladly sign-up with you, if you are addressing their pain points. A solution in search of a problem is unfortunately how many remittance startups are behaving.

If you look at fintech startups in Europe who are into remittances, they are now facing increasingly difficult times to onboard clients. The market competition is at an all time high, even after the exit of many companies due to bank’s de-risking MSB accounts.

Each and every client counts, and with this, each and every client’s monetary and behavioral persona matters. This is science. It man not be rocket science, but it is science nonetheless.

  • How are money transfers done by/before Dewali?
  • How remittances are sent home before Eid?
  • What bonus attributes do working Pinoys look for before sending money home?
  • How does the carnival impact remittances to Brazil?
  • How do the US summer or winter holidays impact remittances?

These are questions, whose answers one will learn over time. Some can be approximated by doing street level interviews and surveys. Not everything can be won using Google Ads (remember a lot many people now employ ad-blocking technology).

Pay close attention to the folks who are sending money and you will most likely have an epiphany on how to go about gaining traction. I cannot stress this enough.

When a money transfer company decides to send its management into the trenches, the view becomes much more clearer, so do the solution and the hurdles become opportunities.


This page was last updated on September 12, 2015.

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