Global payments business TransferTo’s initially just provided mobile network operators (MNOs) with infrastructure to send international mobile airtime top-ups to emerging markets. It has since expanded into the fast-expanding international mobile payments and remittances market, Robin Arnfield reports.
Founded in 2005, TransferTo has its headquarters in Singapore, and is regulated by the Financial Conduct Authority (FCA) in the UK. Its investors include Ingenico.
TransferTo (www.transfer-to.com) operates a cross-border mobile payments network, enabling real-time international mobile airtime top-ups and money transfers to and from emerging markets.
TransferTo’s network interconnects and provides a global compliance framework to over 1,500 partners. These include banks, MNOs, digital financial services firms, mobile money operators, mobile wallet providers, NGOs, and international e-commerce merchants.
“TransferTo processes mobile money transfer and airtime top-up services in over 135 countries, all via a single API connection and commercial relationship,” Nicolas Vonthron, TransferTo’s EVP Payments, Europe, and Africa. “It enables its partners to process digital payments globally.”
Mobile airtime top-ups
“Our initial business involved enabling the transfer of mobile airtime, and this still remains an important focus for us,” says Vonthron. “We have partnerships with over 550 MNOs for mobile airtime, mainly in emerging markets. Around 95% of the population in emerging countries have prepaid mobile phones, and this number is increasing.”
“In addition to the growth of mobile prepaid voice plans, we see growth in prepaid mobile data in emerging markets due to the popularity of smartphones,” Vonthron says. “You can top up a data bundle, and this is on the rise due to the smartphone boom and the rise of Internet connectivity in emerging markets. By 2020, over 50% of the population in emerging markets are predicted to own smartphones.”
TransferTo’s network allows its partners to offer their consumers the ability to send airtime and mobile data credits to friends and family back home. “Airtime and data can be sent not just through the customer’s MNO but also via money transfer operators or any type of mobile app, Web interface, or point-of-sale kiosk,” says Vonthron.
“In some countries, US$3-$5 is worth a month of mobile airtime communication,” says Vonthron. “In developing markets, mobile data is very attractive, as it allows people to access the Internet, use WhatsApp, watch YouTube, or do voice-over-Internet calls. Mobile data top-up is a big market for us.”
The incentive payments market is also important for TransferTo. “A lot of companies are using us to send incentives to customers consisting of mobile airtime top-ups worth under $1,” says Vonthron. “For example, they do this to reward people for taking surveys, for paying bills on time, or for downloading an app.”
However, it isn’t possible to send airtime to mobile wallets. “Mobile airtime transfers and money transfers serve a different purpose, go via different networks, and have totally different regulatory frameworks,” says Vonthron. “Mobile airtime is a commodity, while money transfer and mobile money services are regulated by the Central Banks. TransferTo has a subsidiary which is licensed by the FCA as an authorised payment institution to provide fully-compliant money transfer services.”
TransferTo entered the global money transfer market in 2016 and now offers real-time transfers in over 100 currencies, using over 200 payment partners.
In October 2017, TransferTo said that over 6.3 million transactions were processed across its money transfer network in a six-month period, representing an eightfold increase in revenue between April and September 2017 for the business line. The majority of transactions came from the Middle East, South-East Asia, Europe, and intra-Africa, it noted in a news release.
“Europe is more of a sending region for us than a receiving region,” says Vonthron. “Having said that, we see Eastern Europe as an emerging region. We do a lot of business handling intra-regional transfers, for example between neighbouring African and neighbouring Latin American countries or from Africa to Asia for the Indian diaspora. South-to-South transfers are a major focus for us.”
“The global money transfer business is experiencing a major transformation from the traditional bricks-and-mortar model – where people physically went to stores to send and receive cash – to digital money transfers, especially through aps and mobile phones” says Vonthron.
“We mostly process mobile wallet-to-wallet and P2P money transfers, enabling money transfer and mobile money providers to connect to our network and send money to multiple payout networks.
“We work closely with banks in our key markets, and are also connecting new non-bank digital money providers like M-Pesa and Ecocash in Africa. All these partnerships mean we are able to connect over 2bn people, who have previously been unbanked, into our money transfer network and give them access to this new type of digital financial service.”
Vonthron says that TransferTo is also able to work with major card networks such as MasterCard. “It’s possible to send mobile money from a payment card via our gateway to a mobile wallet held by someone who is ‘newly banked’,” he says. “In addition, we can enable people to send money to prepaid cards, for example for gig economy payments.”More recently, TransferTo has started to facilitate mass salary and commission payouts for companies to their contractors and employees.
TransferTo recently announced that it is working with Grab, a mobile ride-hailing and payments platform in South-East Asia, to enable real-time daily earnings payouts for Grab drivers using their GrabPay account. TransferTo’s network enables Grab’s base of over 1.8m drivers across South-East Asia to link their GrabPay mobile account directly to their personal bank account, or opt for a cash pick-up option as a means of collecting their salary.
“These mass payouts are mostly for low-value amounts” says Vonthron. “Transfers limit depends on each country and regulation. For example, in Kenya, the maximum transfer amount is $700, and in South Asia the limit is $150-$200 in some countries.
“We are working with Central Banks to get them to increase the money transfer limits and to have a risk-based approach to digital money transfers, as we are really trying to reduce cash and informal systems. We do a lot of transfers with and between banks, as they tend to have higher transfer limits than mobile money operators due to the fact that Central Banks impose higher compliance standards on banks.”
“Actually, a lot of our partners see us as a real-time SWIFT interoperability system between mobile accounts for emerging markets, and this has a really positive impact on their services and eventually on their customers. Recently, we were awarded a grant from UNCDF (United Nations Capital Development Fund) to help improve access to digital financial services and reduce the gender gap by leveraging remittances as a channel to improve women’s economic empowerment.”