BENGALURU: Amdocs has released the results of a new survey examining consumer attitudes towards different ways of transferring money internationally. With the World Bank citing that the international remittance market is expected to reach $610 billion this year it represents an attractive, fast emerging revenue stream for mobile financial services providers.
The survey finds that a large majority of respondents (82 percent) using services currently offered by existing players such as money transfer operators (MTOs) and banks, are dissatisfied and that 83 percent of respondents in developed countries like United States, United Kingdom, and Germany ̶ are willing to send money internationally using mobile money, provided they are offered a service that is more secure, convenient, faster, and competitively priced.
Conducted by analyst and consultancy firm Juniper Research on behalf of Amdocs, the survey questioned nearly 3,000 international money transfer service users from migrant communities in the US, UK, and Germany. The study focused on the users of seven main remittance corridors: US-Mexico, US-Rest of CALA, US-Philippines, US-India, US-Vietnam, UK-Nigeria and Germany- Turkey. These corridors account for $78.6 billion in remittances annually.
Key findings of the report include:
- Consumers dissatisfied with traditional services, but unaware of alternatives: More than 60 percent of all respondents use MTOs for sending money. However, the survey reveals a high level of dissatisfaction amongst MTO service users, with 82 percent saying they had one or more issues with their MTO, including cost and speed of transfer. 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 via MTOs, 49 percent of those who prefer a bank transfer and 46 percent who use the Internet. Interestingly, 65 percent of those who list cost as the primary cause of dissatisfaction transfer their money via MTOs, one of the more expensive options. This suggests a lack of awareness of existing alternatives, which may well be cheaper, faster, and more secure than the services offered by MTOs.
- International remittance users are willing to shift to mobile money for their international transfers: 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 money transfer operators (MTOs) is considered, this percentage rises to 92 percent, suggesting that a mobile offering, suitably priced and marketed could have a substantial disruptive effect.
- Strong consumer interest in an international mobile money offering if priced at $5 per transaction or less: 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.
- Cost and security are the main factors influencing how consumers send money: More than a third of all respondents say the cost of money transfer and security are the primary factors determining their choice of money transfer provider. Noticeably, in the Germany-Turkey corridor, 50 percent of respondents cite security as the main influencer, and only 22 percent state cost as the main influencer. This corridor is less price sensitive due to the lower charges offered by the existing options – a third of users pay less than $5 per transactions. The other significant factors influencing consumer decisions are convenience, and transaction time.
“The findings of the survey demonstrate a clear opportunity for international mobile money services to disrupt the money transfer landscape and provide much needed competition within this arena,” said Dr Windsor Holden, Head of forecasting and consultancy at Juniper Research. “With consumers citing cost as a primary factor for service selection, the emergence of a lower-priced alternative is also likely to act as a catalyst for overall growth in the scale of official remittance.”
“Service providers who are able to deliver an innovative, convenient and competitively priced solution can become a viable alternative to the traditional international remittance providers,” said Patrick McGrory, division president for Amdocs’ emerging offerings. “Amdocs mobile financial services solution enables mobile and payment service providers to digitize and mobilize these services so they can quickly tap into new revenue streams by delivering convenient, secure, multi-channel and affordable mobile financial services – the types of innovative services that win customer loyalty in The New World of Customer Experience.”