A large majority of international money transfer service users (82 percent) using services currently offered by existing players such as money transfer operators (MTOs) and banks, are dissatisfied, according to an Amdocs survey.
The report found almost half (47 percent) of all respondents cite speed of money transfer as a major challenge with their current provider, including 48 percent of those who send through MTOs, 49 percent of those who prefer a bank transfer and 46 percent who use the Internet.
More than 83 percent of respondents show a strong willingness to use their mobile phone as a means of sending money internationally.
When current user base of MTOs is considered, this percentage rises to 92 percent, indicating that a mobile offering, suitably priced and marketed could have a substantial disruptive effect.
“Mobile has a strong opportunity to disrupt the money transfer business. As a medium, it provides the ultimate convenience in terms of availability, accessibility and ease of use,” Sharath Dorbala, vice president and head of products, sales and marketing for mobile financial services at Amdocs, told eWEEK. “This combined with innovative business models have disrupted legacy value chains that were built over years and added unnecessary costs on the consumer.”
Dorbala explained that just as Uber upended the transportation business, mobile solutions are poised to remake the established MTO marketplace.
“And that comes right out of our survey: a whopping 92 percent of the people we surveyed who were already using MTOs said they’d be willing to shift to using their mobile phones – mobile money – for this purpose,” he said. “The time is right, and the market dynamics are right. Our survey revealed that people see the biggest benefits of mobile money transfer as convenience, security and cost.”
According to the survey, 41 percent of those respondents willing to use a mobile international remittance service say that they would be prepared to pay up to $4 per transaction, with a further 21 percent prepared to pay up to $5.
“Clearly, security has to be a prime consideration in any money transfer solution – if consumers don’t trust it, and the system cannot ensure safety, it won’t work,” Dorbala said. “While the established MTO model has some drawbacks–such as cost, with multiple entities taking chunks out of the transaction at every step of the way–it has proven itself to be secure.”
He pointed out that mobile money solutions are in fact raising the standards of security at a device level where it is more vulnerable.
“For example we see biometrics like finger printing, facial recognition, two-factor authentications, and encryption technologies and of course the security offered by mobile networks itself adheres to that same high standard of safety and security,” Dorbala said. “In fact, sending money over your mobile device is equally or even more secure than a credit transaction.”