DUBLIN (Reuters) - Free chat and calling apps that keep migrant workers in contact with family members back home are transforming the money transfer business and online remittance provider WorldRemit is seeking partnerships to capitalise on this trend, its chief executive said.
Ismail Ahmed, a Somalia-born entrepreneur who heads UK-based WorldRemit, said he’s talking to communication providers such as Facebook’s WhatsApp, Microsoft’s Skype or Rakuten’s Viber to help send money to families abroad. WorldRemit, one of Britain’s fintech start-ups, has held talks with several messaging providers and aims to close deals next year, he told Reuters.
The company expects to handle $1 billion in transactions this year and at least double revenue from 15 million pounds ($22.6 million) in 2014.
Marking its momentum, it has won regulatory approval from California that will help it enter the biggest U.S. market next week. This will drive more business with migrants there who send money home to Latin America and the Philippines, Ahmed said.
“Partnerships with messaging apps are coming next year,” Ahmed told Reuters in an interview at Web Summit, Europe’s largest annual Internet conference.
“Next year you will hear lots of announcements,” he said of the company’s strategy of pursuing tie-ups rather than acquisitions of its own.
Free, frequent calls home are changing money transfer habits, as more migrants now send amounts of as little as $20 in response to specific needs or family emergencies rather than big lump sums once every month or two, Ahmed said.
Online providers such as WorldRemit are shaking up the established retail-based money transfer business dominated by Western Union and MoneyGram by delivering money at lower cost to recipients on their mobile phones.
Disruption in a market known for high commission fees and transaction volumes estimated by the World Bank at $440 billion this year is driving a wave of consolidation across the remittance industry.
In July, PayPal agreed to buy rival remittance firm Xoom.com for $890 million, while Euronet Worldwide, owners of remittance player Ria Digital, bought forex firm XE.com for $60 million.
WorldRemit is focussed on executing its own expansion plans, Ahmed said. “We haven’t talked acquisitions with anybody at this point,” he said.
Reporting by Eric Auchard; Editing by Keith Weir