Is there Money To Be Made in the Money Transfer Business (Part II)?

This is the second part of the earlier video I made called: Is there Money To Be Made in the Money Transfer Business.  

In this video I talk about: Understanding Value Added Payments.


Hello my name is Faisal Khan. I am a banking and a payment consultant. This is as I guess a second part to the question that someone asked us you know is there money to be made in the money transfer business.

The answer is yes there’s waiting to be made. It is tough but there is money to be made. Fifteen – twenty years ago the money was easy because there was not too much competition. There was not too much compliance. The ability to get a money transfer license and there was not much knowledge being shared etc. So it was very difficult to get into the business and those that were in the business found it very easy to make money. The margins were good.

Today, as the competition increases as more and more knowledge out there etc. where the world is becoming more connected including the financial system, making money as a money transfer operator is not easy. It’s not difficult either but it’s not easy. There is money to be made but if you’re relying solely on making doing person to person transfers and nothing more, then things will heat up for you. The squeeze will start. You need to think beyond just you know doing person to person transfers. You need to think bill payment. You need to think mobile bill payment. You need to think Okay, if I am based in let’s say in New York and my family is in Dhaka or is in Mumbai or in Philippines, what do I want to do? I want to send the money, but what do I don’t…what I don’t want to do is I don’t want them to mismanage the money I am sending.

So there are bills to pay. If I send the money and they mismanage it and they don’t pay the bills I will end up paying those bills and I will end up sending them more money. But if I can pay the bills from here and not there then they won’t have any money to mismanage that money, the bills have already been paid. So think about bill payments, think about school fees payment, insurance payment, rent payments. Think about saving bonds think about, you know, micro investments into things like jewelry when daughters get you know come of age and they get married. It’s a huge huge custom in South Asia that you must have certain amount of gold for them.

So think about, think about investing in value added services. Think about how you can load money directly onto a grocery chain card in Philippines rather than giving your cousin or your daughter or your son the money directly. Think about things that are beyond just receiving money. What do you do when you receive the money? You will spend it. Where do you spend it? You spend it at merchants, you spend it at banks. Either you spend it or you save it. Those, those facets of spending and saving is what you should be thinking. Think about how you can interact with marketplaces. Think how you can do delivery payments for marketplaces like Google or Fiverr or Upwork etc.

Think about how you can do travel payments for travel aggregate companies. You need to think outside the box. The traditional very vanilla box is a loss maker, unfortunately, in the long run. You need to think, be more creative, you need to be more assertive and you really need to go out there and find solutions. And one of the most important part that people forget about this thing is: You need to have a very strong technology stack. Without a strong technology stack you will not be able to do all these things that I’m talking about. These are all just be pipe dreams. So there is money to be made. You need to invest into it. You need to find the partners you need to find the what goes what flows into your countries or corridors that you work with where you could possibly make money.

If you would like to learn more, I’d be happy to get on the call with you and explain more. There is a contact form in the description below you can fill it out. There’s a link to a contact form and you can fill it out and I’d be happy to discuss. Till next time, have a good one.