- Azimo’s spectacularly rapid growth driven by rising migrant labour
- Company’s user base expanded to 1.5 million in 2017
- Recently inked a deal with major African payments group Interswitch
Emerging British fintech international money transfer firms Azimo, TransferGo and WorldRemit are capitalising spectacularly on the steeply rising demand among fast-expanding migrant populations who want to send money abroad to friends and loved ones, the online news and information resource for payments and financial-service professionals, PaymentSource, has reported.
Until recently, high street money transfer services like MoneyGram and Western Union have formed a duopoly on migrant payments. However, as the article notes, that’s all changing as smaller, nimbler, tech-powered rivals are undercutting their cross-border transfer fees, which in many instances can be as high as 29%.
PaymentSource journalist David Cox spoke with Michael Kent, the CEO of UK-based fintech payments service Azimo, which allows its customers to send money abroad to over 190 countries using over 80 currencies swiftly and simply using its money transfer online platform via a smartphone app or its website. In 2017, the company handled a staggering $1 billion-plus in transactions and saw its customer base expand to well over 1.5 million. A key attraction has been far swifter money transfer services for a fraction of the fee charged by legacy providers.
Kent told Cox: “If you look at the aggregated statistics, the average user of our platform will be sending 25 to 30 percent of their monthly salary home. They use it fairly frequently, sending money more than 20 times a year, and they send about $450 each time, generally to one or two people … banks tend to charge significantly more than they need to on the foreign exchange.”
Whereas the average remittance fee for conventional providers stands at between 7 and 10%, Kent explained, Azimo only charges between 1.5% and 3%, largely because the firm doesn’t use retail locations and is replacing people with technology. Kent continued: “For example, Western Union [has] to pay a cut to the newsagent offering the service, that's something in the value chain we don’t have to feed.”
The Azimo platform functions by means of integrations with a vast network of payments providers across the world, ranging from high street banks to card processing firms. In September this year, it unveiled a new partnership with the huge African payments group Interswitch, which has allowed migrants living in the UK and 22 other European countries to digitally send money abroad to the largest economy in Africa, Nigeria.
What attracts migrants who have relocated to Britain from financially underserved countries above all else is the raft of payment options it provides. They can send money abroad using a mobile wallet, a bank branch, a pick-up location or home delivery. In the Philippines, it even has a courier partner delivering envelopes stuffed with cash to recipients.
The unique customer base, Kent says, constantly drives Azimo to innovate novel ways of receiving money. Much of its phenomenal growth has arisen due to the fast-rising size of the migrant market, an audience which has effectively been ignored by cross border payments leviathans like PayPal and TransferWise.
Azimo, Kent explained, is providing services to customers who aren’t interested in the mainstay of British retail banking revenue – mortgages – because they’re not buying houses, which has meant that they’ve largely been overlooked, but clearly not by Azimo.
If you’ve enjoyed reading about Azimo, you might like our recent article on the company here.
