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The International Payments Industry Is Hot! How Will 2019 Compare?

The International Payments Industry Is Hot! How Will 2019 Compare?

For those of us who’ve ever found ourselves in the position of having to send money overseas to family or for a small business payment, we’ve all felt the dread of having to deal with banks and wire transfers.

Most traditional banks charge relatively high fees on international money transfers and payments for decades now, as well as not being transparent with exchange rates and while that is still a factor in certain markets, that’s certainly not the case today in many countries in the world.

The rate of growth that some fintech money transfer companies have experienced over the past few years has been staggering, with many of the industry leaders calling the UK home. Regulation pushing for a level playing field has contributed to the growth of Non-Bank Financial Institutions, NBFIs, as either Payment or Electronic Money Institutions.

With extensive knowledge of the money transfer market, Leon Isaacs is well placed to discuss these trends, and commented that “the global money transfer/remittance industry is in a state of flux. The traditional or historical cash-to-digital-to-cash based operators are at a cross-roads.”

“They have invested heavily over the years in establishing physical distribution networks at both the send and receive sides of a transaction. However, the advance of digital services, online or app based on the send side and mobile driven on the receive side, are challenging the old way of doing business. Many traditional operators are therefore going through a readjustment process to try to move customers to digital methods whilst trying to maintain margins and keep existing cash in/cash out outlets happy.”

Chief among those who have seen a lot of success is TransferWise, the well-known UK fintech unicorn that has recently been valued at $1 billion after raising over $390 million of funding in seven rounds but has only recently started seeing a profit after six years in existence.

Who can remain profitable?

Rob Ayers, CEO of Fintech-Advisors, commented that “most brands, including TransferWise, report rapid increases in transactions and customers, but profits remain elusive for all of these new fintechs. Investment money proliferates, but we’ll see who can leave the red ink behind.”

One thing we do know is that with investment at an all-time high, we’re going to see a continual rise in viable alternatives to traditional banking, and with the World Bank estimating that migrants from all over the globe sent a combined more than 600 billion a year and continuously growing, it’s not hard to see why.

Hugo Cuevas-Mohr, Director of IMTC and Mohr World Consulting commented: “Even if only 10-15% of cash-based migrants are convinced to move to digital outbound money transfer methods, these digital-first fintechs are growing by acquiring clients from banks by providing transparency and easy-to-use apps”.

Aamer Abedi, CMO of RemitONE, a UK’s top money transfer solution, believes that the money transfer industry in the UK is going to witness key shifts in 2019. “The uncertainty of Brexit created a slowdown in the UK market in the past two years but in 2019 our licensing services and new clients using our payment platform have rebounded, and we are witnessing a rise in the number of new money service business setups in the UK and these setups are mostly  subsidiaries of established MTOs and banks in the Gulf and Africa. But the drive in IT will certainly come from traditional companies looking for top-of-the-line solutions to connect with the API’s of fintechs, banks and other service providers.” concluded Abedi.

It’s not just Aamer Abedi who is optimistic about the future of the industry in the UK. “How is this translating into Fintech?” asked Leon Isaacs.  “Well in the UK, Fintech continues to grow in terms of new entrants and potential solutions driven by a welcoming regulatory environment and a strong pool of technical expertise.  This will continue for some time but there is always the dark cloud of Brexit on the horizon that could have catastrophic negative effects on Fintechs and financial services in general if it is not implemented properly.

Nina Huelsken, a consultant based in Germany and co-chair with Leon Isaacs of the coming   IMTC EMEA 2019 industry event this July in London, commented: “As ever, the industry needs to discuss all these matters, visualize the trends, find new partnerships to expand services or distribution channels, to share experiences and views and then get on and implement solutions. We can’t forget that blockchain-based solution and cryptocurrencies are also creating an ecosystem that is being interconnected to the industry. Just follow what Ripple and IBM are doing.”

Don’t misunderstand, the financial services industry is nowhere to be disrupted altogether as traditional banks and non-banks are looking for ways to re-invent themselves. Anyone that is set in their ways must think outside the box in an attempt to remain competitive or peril.

Talking about how 2019 looks to be shaping up, Leon Isaacs believes that “2019 is currently shaping up to be a good year for money transfer, remittance and payment companies. Flows and revenues are increasing as migration continues to grow and bucks the increasing anti-immigrant sentiments around the world.

“It also looks like prices will remain stubbornly high as competition continues to be somewhat limited due largely to derisking efforts by banks that unfortunately do not really show any prospects of improving, unless that is, governments put proper pressure on banking institutions (something they have singularly shied away from doing up to now).”

Compliance is key

Another critical factor in the success of these new fintech companies, and the industry as a whole, is strong compliance.

As Rob Ayers says, “the compliance noose will continue to tighten on both sides of the Atlantic (and elsewhere)’. Brandi Reynolds, a US compliance consultant commented: “There is no evidence that compliance requirements will ease any time soon but new technological solutions are helping compliance officers manage red flags, create and build reports and better succeed in control the risk that certain corridors or products present”.

What are the challenges? What are the opportunities?

One thing that is for sure is that the industry is as exciting and innovative as it’s ever been, but challenges still abound such as the ones already mentioned: derisking, technology updates, compliance and regulation, without forgetting Brexit and the “trade wars”. But every challenge always brings an opportunity.

The RemTech Awards 2019, an initiative established to foster innovation in the industry, will be announcing this year’s winners at IMTC EMEA in London on July 3. With close to 30 entries this year, the awards are an example of how dynamic the industry is. Olivia Chow, the RemTECH Awards Coordinator says “when we launched the awards in 2016 at the United Nations in New York we didn’t know if innovators were going to join and every year since then the suspense and the anticipation has been mounting. We can’t be happier. Right now the 2019 entries are collecting votes, by mid-june the judging panel will decide the winners and on July 3 in London we will hand in the trophies!”

Hugo Cuevas-Mohr, is also excited about the coming event: “Besides the influential co-chairs Leon Isaacs and Nina Huelsken, we will have some of the most knowledgeable panelists and colleagues from more than 15 countries converging in London on July 1-3. I will be delighted to see Faisal Khan, Catherine Wines, Claire Scharwatt, Deb Thoren-Peden, Miguel Linares, Lourdes Soto, Daniel Wood, George Harrap, John Burns, Salvador Velazquez, just to name a few.“

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The benefits of Ethereum 2.0 will come sooner rather than later according to Vitalik Buterin

The benefits of Ethereum 2.0 will come sooner rather than later according to Vitalik Buterin

Quick take

1 minute read

  • Vitalik Buterin, has recently answered a number of questions from the community as a part of a “ask me anything“ session on Reddit. 
  • The co-founder highlighted many different topics but specifically said that he expects some significant and noticeable network improvements to come for the project sooner rather than later. 

Vitalik Buterin, the co-founder of one of the biggest crypto projects in the industry known as Ethereum has recently answered a number of questions from the community as a part of a “ask me anything“ session on Reddit. The co-founder highlighted many different topics but specifically said that he expects some significant and noticeable network improvements to come for the project sooner rather than later. He further said:

“TLDR: merge happens faster, PoS happens faster, you get your juicy 100k TPS faster.”

Over the years, the network for Ethereum has experienced some significant rounds of high congestion. Three years ago in 2017, the popular CryptoKitties game slowed down the network massively but with the decentralised finance space growing rapidly, the network has been seriously clogged up.

As a result of this, it has led to high fees and longer than average confirmation times.

With Ethereum 2.0 very much just around the corner, there is a significant scaling upgrade solution that is supposedly going to speed up the network rapidly. This will increase the number of transactions per second and it will also move the blockchain to a different consensus algorithm known as a proof of stake. Phase 0 for the upgrade is set to occur on the 1st of December in two weeks!

The co-founder further went on to say that “all of these changes are designed to decrease the time until eth2 becomes useful to people.” 

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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The second richest man in Mexico invest 10% of his portfolio into BTC

The second richest man in Mexico invest 10% of his portfolio into BTC

Quick take

1 minute read

  • Ricardo Salinas Pliego is the second wealthiest businessman in Mexico and the 166th richest man in the world. 
  • It was recently announced last week that he has invested 10% of his liquid portfolio into the leading cryptocurrency, bitcoin. 

Ricardo Salinas Pliego is the second wealthiest businessman in Mexico and the 166th richest man in the world. It was recently announced last week that he has invested 10% of his liquid portfolio into the leading cryptocurrency, bitcoin. This came after he shared a video throwing huge amounts of paper money into the garbage. Not only does it show how worthless the government-issued cash is in today’s world but it also shows how important digital assets such as bitcoin could become.

Furthermore, the video indicates the hyperinflation and how bad it got in Venezuela.

Ricardo is worth more than $11 billion at the time of writing and is the only billionaire from Mexico who seems to have benefited from the coronavirus pandemic and the economic crisis that has come as a result.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Coinbase co-founder, Fred Ehrsam set to join Fireblocks as a member of the board

Coinbase co-founder, Fred Ehrsam set to join Fireblocks as a member of the board

Quick Take

1 minute read

  • Fred Ehrsam, the co-founder of the crypto platform known as Coinbase is getting ready to join the digital asset security platform Fireblocks. 
  • It was announced last week that Fred would be joining the board following a recent round of funding.

Fred Ehrsam, the co-founder of the crypto platform known as Coinbase is getting ready to join the digital asset security platform Fireblocks. It was announced last week that Fred would be joining the board following a recent round of funding.

The co-founder of the well-known crypto platform is getting ready to join the company as a board member following a $30 million funding ground to help expand its operations on an international level.

Throughout 2020, Fireblocks has launched a secure asset transfer network which would allow more institutions to efficiently transfer assets on chain. And on top of this, the platform also announced that it has seen more than $150 billion in transferred assets over the course of the past year. Fred has said:

“Fireblocks has become the go-to for any business looking to build new digital asset operations or scale existing ones… The extraordinary growth of the Fireblocks Network and its team in the last year attests to the enormous value they have unlocked for enterprise and institutional customers.”

 

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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XRP Price Analysis: XRP Continues Correcting

XRP Price Analysis: XRP Continues Correcting

This analysis brought to you by RoboForex.

On Friday, November 27th, XRP has reached stability but is still correcting and trading at $0.5550.

As we can see in the daily chart, after finishing a quick rising wave, XRP/USD price is correcting to the downside. At the moment, the asset is trading close to 61.8% fibo, a breakout of which will indicate further pullback towards 50.0% fibo. The MACD histogram has broken 0 and is still moving to the upside – it may be another signal in favor of a new rising impulse. The upside target of the completion of the correction will be at 0.6800.

In the H4 chart, the cryptocurrency continues correcting to the downside. Right now, it is testing the support level, a breakout of which will result in further decline towards 50.0% fibo. The Stochastic indicator has formed a “Black cross” inside the “overbought area” and is still falling, which is an additional signal in favor of further decline towards 50.0% fibo. After completing the correction, the asset may test and break 61.8% fibo, and then continue trading upwards. The upside target is similar to the daily chart, 0.6800.

Ripple started its rally on November 20th, together with other cryptocurrencies. There are a lot of explanations of why it happened, from investors’ search for alternatives to fiat instruments to a surge in interest in cryptoassets from institutional players. Indeed, all of this really took place and, of course, expansion of the interest was in favor of cryptocurrencies. The entire market is on the rise but since “trees don’t grow sky-high”, active purchases faded to the correction.

Over this period of time, XRP has managed to update its high reached in May 2018. The asset is still moving like 80% below the highs of January 2018, when it was trading at $3.7, but investors are surely positive about further growth.

At the moment, XRP is back to third place in the list of the strongest and most popular cryptoassets.

By Dmitriy Gurkovskiy, Chief Analyst at RoboForex

 

Disclaimer

Any predictions contained herein are based on the author's particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

 

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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