MUMBAI, INDIA: A survey finds that a large majority of respondents (82 per cent) using services currently offered by existing players such as money transfer operators (MTOs) and banks, are dissatisfied and that 83 per cent of respondents in developed countries ̶ United States, United Kingdom, and Germany ̶ are willing to send money internationally using mobile money, provided they are offered a service that is more secure, convenient, faster, and competitively priced.
Amdocs released the results of a new survey examining consumer attitudes towards different ways of transferring money internationally. With the World Bank citing that the international remittance market is expected to reach $610 billion this year it represents an attractive, fast emerging revenue stream for mobile financial services providers.
Conducted by analyst and consultancy firm Juniper Research on behalf of Amdocs, the survey questioned nearly 3,000 international money transfer service users from migrant communities in the US, UK, and Germany. The study focused on the users of seven main remittance corridors: US-Mexico, US-Rest of CALA, US-Philippines, US-India, US-Vietnam, UK-Nigeria and Germany- Turkey. These corridors account for $78.6 billion in remittances annually.
The findings unveil that consumers are dissatisfied with traditional services, but unaware of alternatives.More than 60 per cent of all respondents use MTOs for sending money. However, the survey reveals a high level of dissatisfaction amongst MTO service users, with 82 per cent saying they had one or more issues with their MTO, including cost and speed of transfer.
Almost half (47 per cent) of all respondents cite speed of money transfer as a major challenge with their current provider, including 48 per cent of those who send via MTOs, 49 per cent of those who prefer a bank transfer and 46 per cent who use the Internet.
Interestingly, 65 per cent of those who list cost as the primary cause of dissatisfaction transfer their money via MTOs, one of the more expensive options. This suggests a lack of awareness of existing alternatives, which may well be cheaper, faster, and more secure than the services offered by MTOs.
International remittance users seem to be willing to shift to mobile money for their international transfers. More than 83 per cent of respondents show a strong willingness to use their mobile phone as a means of sending money internationally. When current user base of money transfer operators (MTOs) is considered, this percentage rises to 92 per cent, suggesting that a mobile offering, suitably priced and marketed could have a substantial disruptive effect.
The survey also dug strong consumer interest in an international mobile money offering if priced at $5 per transaction or less. According to the survey, 41 per cent of those respondents willing to use a mobile international remittance service say that they would be prepared to pay up to $4 per transaction, with a further 21 per cent prepared to pay up to $5.
Cost and security are the main factors influencing how consumers send money nonetheless. More than a third of all respondents say the cost of money transfer and security are the primary factors determining their choice of money transfer provider. Noticeably, in the Germany-Turkey corridor, 50 per cent of respondents cite security as the main influencer, and only 22 per cent state cost as the main influencer. This corridor is less price sensitive due to the lower charges offered by the existing options – a third of users pay less than $5 per transactions. The other significant factors influencing consumer decisions are convenience, and transaction time.
"Service providers who are able to deliver an innovative, convenient and competitively priced solution can become a viable alternative to the traditional international remittance providers," said Patrick McGrory, division president for Amdocs' emerging offerings.