Specialist
Senior executive at The Western Union Co
Agenda
- Remittance growth trends across individual and business segments
- Average payment value dynamics and profitability trends
- Revenue per transaction drivers – fixed vs variable fee trends
- Banking partnership dynamics and cost drivers for key corridors
- Competitive dynamics vs incumbents
Questions
1.
What are the key trends and developments in international remittances, especially those related to the pandemic?
2.
What would you say is the share between international digital and cash remittances? I understand the mix will differ depending on the market or currency.
3.
Are cash-to-cash or cash remittances full cash or are they digital-to-cash? Do they include all of these?
4.
Would you imagine that the pure-play digital, account-to-account and hybrid players gained market share during the pandemic vs traditional cash-to-cash and banks?
5.
How would you assess the remittance market shares of banks, cash-to-cash, digital and hybrid, considering you mentioned it was a USD 563bn market in 2020?
6.
Does Xoom, a PayPal service, have its own kiosks or physical locations where people can collect, or does it typically work with a local agent or another cash-to-cash remittances player with an established footprint?
7.
Can digital-to-cash be more profitable than digital-to-digital, as a higher fee can be charged?
8.
What competitive advantage do you think Xoom has by offering a hybrid of digital origination and physical cash disbursement? I know that was a challenge for growing in the India corridor, because many recipients wanted to collect cash. Could this lead to Xoom and other significantly cash-based players taking market share?
9.
How do you think about the origination cost for a digital vs a physical cash remittance player?
10.
Do you only pay banking fees on cross-border transactions?
11.
What’s the advantage of having your own funds in a certain location? Does that reduce or eliminate the banking fee?
12.
What’s the typical cost of cutting out all the third-party steps you mentioned and going straight to the local payment partner? Wise’s annual report states it spent around USD 84m in bank and partner fees up to 31 March 2020 on a transaction value of USD 67bn. Would the average fee be USD 84m over USD 67bn, which I believe is around 12.5bps? Is this in line with your expectations?
13.
How difficult is it to maintain banking partner relationships on the ground? That strikes me as strategically significant for Wise’s overall business model. How difficult would it be for a competitor to replicate the company’s local banking partner network?
14.
Could PayPal or Xoom establish local banking partnerships relatively easily in most markets they enter and put up larger balances and secure lower fees than Wise, or is that not how it works?
15.
Do you think there is scope for Wise to optimise its banking partner relationships, or is it already getting the best possible rates?
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