Editor's Choice Paytech

TransferGo on Cross-Border Market Trends

By Kate Goldfinch

TransferGo is a digital remittance solution for migrant workers with almost 2M clients globally. “Send money around the world within just 30 minutes. Secure, safe and 90% cheaper than banks” – is the core company’s message. TFT discussed with Daumantas Dvilinskas, CEO & Co-Founder at TransferGo, cross-border market trends and consumers needs.

Kate: What trends spark the growth of the cross-border market?

Daumantas: I think it’s a combination of two major trends. The first trend is the world is becoming much more globalised. The workforce is mobile and they choose to work in the best places for them to bring prosperity to their friends and family. So that’s why they leave, that’s why they find the jobs across Europe or beyond. The second one is digitisation. The global remittances market and the global money transfer market is going through major digitisation right now going into 11% year on year. That’s projected to continue to 2023, by which the total global digital ecommerce market would be more than $400 billion by 2023. So just to give you a taste of today, global digital remittance market is just 20%. Everything else is cash. 

Kate: But some countries are totally digitalised…

Daumantas: When you look globally, it’s 20%, but when you look at European countries, they’re leading the way in digitisation. 

For example the UK is what we call an early adopter market. All the innovations started here. The Baltic States are early adopter markets as well. The Ukrainian market has left cash completely and now their first migration falls into Europe and they choose digital. So it just shows that this trend is very real. But we see it globally because now we’re growing in other geographies like Turkey and India which gives you the same trends. So these two make it a very powerful combination for sustainability of this market. 

Transparency and ease of use is what we are trying to focus on.

Kate: On the TransferGo website you mention that your transfers are 90% cheaper than banks. How does it work and what is the difference between SWIFT gpi and your service?

Daumantas: So with us, if you want the money to be there in real time, under 30 minutes, it’s going to cost you 99p. Also, we are offering the 30 minutes transfers, which others can’t offer. Let’s consider how it works. For example, I’m a Ukrainian migrant in Poland. So the way we move money from Poland to the Ukraine is by actually not moving money from Poland to the Ukraine. The way it works is you would pay us locally in Poland, and that transactions paid with a card or bank transfer that stays in Poland. That individual transaction avoids SWIFT, and all the cumbersome correspondent banking systems because we pay out locally, from our local bank-partner to the local recipient’s bank account. 

That’s why you completely bypass the expensive SWIFT System. That’s one of the reasons why we can offer the competitive terms and values. You know it’s sometimes easier to start from scratch than build and improve a broken system. So I think as long as we keep innovating, we will always be two or three steps ahead of traditional systems being improved over time.

Kate: So your core idea is not to push people to find out new financial providers, but to get international transfer services from local banks partnering with your company? 

Daumantas: Exactly. The clients should not care about banking networks. Me, like the client, want to get just the best service. So transparency and ease of use is what we are trying to focus on. And you know, we’re fortunate enough to now work with 50 bank partners globally. 

Kate: What allows you to stay competitive at cross-border market? Prices, speed of transactions, UX..?

Daumantas: I think the companies who are here today and growing well, are the companies who are able to provide the best user experience. I don’t think that it’s going to be a question of who is going to hit the bottom in fees first. Because if that was the case, people would have already done it. There is a certain brand requirement because there’s a trust business. People want to trust the best brand that consistently delivers on their promises and they’re okay to pay a fair price for that. That is a thing that we see in the market. So I think it’s going to be a war of best products.

As long as we keep innovating, we will always be two or three steps ahead of traditional systems.

Kate: Do you believe that tech giants like Facebook, Amazon and Google will realise the concept of a financial internet? Facebook is already on its way, launching stablecoin….

Daumantas: I’m personally not that afraid of Google or Facebook coming into this market. These tech giants are looking at this space but, you know, recently Facebook stopped their peer-to-peer payments. This is really the third time they try and shut it down. The reason the first time they tried, to my knowledge, is they were not aware of the thing called compliance. It was a scam overnight.

Because to build a business like that, you need to build PayPal on Facebook. It’s not just an add on product. It’s not like to add a GIF. It’s a money transfer business. If you look at history for example, Telcos should have been ideally positioned to do something like that. However they have failed to win or offer a competitive service. There again, they have all the clients, they have all the distribution, but they’re not the payment.

I think that PayPal with its Zoom have more chances of being successful in this space than other companies because they’re a payments provider. They inherently have payments and financial services’ DNA. MasterCard and Visa are also looking at this space acquiring relevant service providers. 

So I would bet more on PayPal and Western Union to reinvent themselves before Facebook or Google would come in as a threat. 

Kate: What do you think about decentralised technologies like Ripple or IBM World Wire as cross border market players?

Daumantas: Ripple is one of our investors and we believe in them a lot. Their platform is used by different banks as well, like UBS or anyone else.

Ripple is like a messaging platform, on top of. But they do not do the end mile, which is what we do. So we see them as an additional, a new technology layer that can help us to accelerate. Also among their values are a scalable API and a bit centralised system, allowing them to take care of compliance.

Kate: Do you plan to collaborate with Ripple? 

Daumantas: We already do that. We had our first quarter live for money transfers to India with Ripple as a partner.


  • Editorial Director of the The Fintech Times

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