In Singapore, MariBank, the digital bank subsidiary of Sea Group, launched a remittance service, MariBank Overseas Transfers, that will allow retail and business users to send money to 13 destinations including China, Indonesia, India and the U.S. The service supports 10 currencies, including CNY, IDR, and USD. MariBank also offers the option to send funds in CNY to Mainland China via Alipay or UnionPay which will be immediately processed. This move makes MariBank the first digital bank in Singapore to offer such a service and it has wasted no time in trying to attract customers by offering a zero-transfer fee promotional campaign. While it is still early days, we can expect to see other digital banks launching similar services as remittance increasingly becomes an essential part of a digital bank’s suite of offerings.
Noting the increasing competition and disruption from fintechs, incumbent players have also been active in forging partnerships. Visa recently announced a collaboration with USSC Money Services (UMSI) to launch Visa Direct in the Philippines, which will enable UMSI’s business customers to make faster cross-border payments. The Philippines is known for its strong outbound payments market, especially in the B2B space, and many of the existing pain points have yet to be adequately addressed. As Filipinos increasingly become familiar with digital money movement, many are preferring digital options over traditional money movement methods which tend to have higher fees, lengthy processing times, and require the customer to visit a physical location.
Mastercard also recently joined forces with Malaysia-based payment platform Instapay to enable migrant workers residing in Malaysia to perform near real-time fund transfers to their home countries in local currencies. Through Mastercard Move, Instapay’s users from countries such as Indonesia, India, Nepal, Bangladesh and the Philippines will benefit from simplified transfers while being able to track fees and estimated delivery times. The collaboration with Mastercard will also allow Instapay to tap into Mastercard’s global payment network and significant cross-border transfer knowledge.
The long tail of small value, high volume remittances has traditionally been a challenging segment of the market to address due to high fees, long wait times and security concerns among others. However, this situation looks to be improving with fintechs providing new and innovative approaches. It is still too early to determine which of these will prove to be game-changing solutions, but the proliferation of remittance options for this previously under-served segment appears to be a win.