Remitly, preparing to go public, detailed a cross-border payments opportunity worth in the trillions of dollars annually, and said that the global remittance market is ripe for a tech-led overhaul toward mobile channels.
To that end, in the filing with the Securities and Exchange Commission (SEC), the company said that in terms of the overall market size, cross-border remittance and banking are “two of the largest financial services markets in the world.”
The cross-border remittance market saw $1.5 trillion in total migrant remittance inflow volume in 2020, and as Remitly said in the filing, it generates $40 billion in transaction fees worldwide.
But the market is hampered by a lack of technological innovation, the company said, and is dominated by banks, brick-and-mortar locations and informal channels – which translates to a lack of financial inclusion. The company said there are more than 280 million immigrants across the world who are excluded from access to common financial services.
But with mobile tech enabling money sending and receipt, trust, reliability and fairer pricing can be in the offing, the firm said. The company noted in the filing that more than 85 percent of the company’s customers engaged with Remitly via app.
Drilling down into the data, the company said that in 2020, customers completed 31 million remittance transactions. Send volume was $16.1 billion for the 12 months that ended in June 2021, which represents about 1% of the total addressable market.
The company’s year-over-year growth rate of more than 103 percent brought the top line to $257 million in the year ending December 2020. Loss from operations narrowed to $29.1 million from $50.6 million in 2019.
In a nod to the growth prospects across the sector, Western Union’s results show that cross-border principal, as measured in constant currency, was up 25 percent year over year to $49.9 billion. In the most recently disclosed information, customer count at the June quarter stood at 2.4 million, up from 1.5 million last year.
With details on offerings tailored to the immigrant community, the company recounted that last year, it launched Passbook in partnership with Sunrise Bank N.A.
“With tailored KYC and identity verification processes using our existing technology platform, [these users] can sign up for a Passbook account in under 10 minutes. Since the launch of Passbook in February 2020, we have seen encouraging early adoption, and we continue to build out our suite of offerings … we will be able to utilize the data and insights gathered from our remittance customers to tailor meaningful financial services for the needs of our immigrant customers,” the company said. The initial Passbook app offerings are focused on deposits, with other features to follow.
As detailed at the time, each Every Remitly Passbook customer gets a Visa debit card. No Social Security number is necessary to open a Passbook account, according to details surrounding the launch. And as reported by PYMNTS, Remitly verifies a person’s identity digitally and accepts forms of ID that immigrants have, incuding Individual Taxpayer Identification Numbers, passports and foreign government-issued documentation.
Revenue from the U.S. represented $199 million in 2020 or 77 percent of total revenues for the year, with cross-border payments in over 1,700 corridors from 17 countries to over 115 countries, in over 75 currencies, per the filing.