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Should I create my own payment app?

One of the hottest niches in tech right now is payments. If it’s big enough for Google, Apple and Paypal to pursue – it’s BIG. If the Bitcoin, a currency built specifically for instant (de-centralized) online transactions, increase in value 100-fold over a period of several years, it is another very solid indication the world is moving towards digitized transactions. In fact more than 50% of all transactions taking place in the USA are cash-free.

Building a money transfer application has more than a few hurdles. Many have tried and failed, and the others are sitting on the fence waiting for the industry to boom to make substantial profits. The top money transfer apps in 2018 are composed of large companies who have been in the domain of online payments from way before mobile apps even existed.

The difficulties of creating money transfer apps

Regulation

The biggest hurdle in creating a money transfer app is definitely NOT the programming you need to put in, nor the UI, no anything else you would traditionally say is the sticking point of creating app. It’s regulation.

When you handle people’s money, you need to be carefully inspected and show beyond any reasonable doubt you are eligible to be in this position. It goes way further than just the regulator, by the way – banks are very reluctant to deal with you, and so us other providers. So, you need to be approved by a regulator (or SEVERAL regulators if you are going to accept people from different regions in the world), be in excellent relations with at least one bank, and prove one or more tax authorities people are not using your platform to evade taxation.

All of the above is far more complex than it sounds and it will require serious resources to accommodate all of the above, and particular as a startup.

Liquidity pool

If you are going to handle people money you need a line of credit to enable real-time transactions. That means that you need to cover the deficiency in cash inside your system between the time that someone pays, and until you actually receive the money. That is a significant issue and you need to have significant reserve pools just in any case. What happens if your security is breached and some money is stolen off the system? What happens if you have a an unusually high number of feedbacks in one certain month? You need a few millions of dollars to be sitting aside to facilitate a real money transfer network.

Product

Although this aspect only comes third on our list, to compete in the payment business you have to come up with a very slick app that appears trustworthy, maintains the highest level of security (super important), and is easy to use as your target audience is very broad. In essence, you need to out-do companies which have been in the market since before the 2000 high-tech bubble like Paypal. It is obtainable, but it will require high level of expertise and yet again – a sizeable investment.

Foreign exchange – liquidity and capability

If you intend to accept clients from overseas who are paying via multiple currency, you need to be able to exchange foreign exchange through your application. This requires connecting with a source of liquidity provider who is also able to facilitate currency exchange, and a lot of additional hurdles when it comes to product development and regulation. Cross border transfers tend to be more sensitive and difficult to execute.

Finding partners / Marketing

Payment applications is a very saturated market, and thus, you will need to be able to compete through not only better offering than your competitors, but in fact have powerful business partners who are able to integrate your payment app into their systems. Apple and Google don’t need such a partner, being of such immense size and influence, but you would need them.

Not making money

When you go into an overly competitive market which is currently focused on acquisition and not profit, you would not be able to compete if your prices would be higher than your competitors. Venmo is practically free when it comes to transfers in the U.S, similarly  Google Pay and Apple Pay, and cross-border applications like Transferwise’s charge as little as 0.5% off each transaction, you are not going to be making money in the short and medium term. This is a long term game.

Final words

Looking at all the hurdles expected, you should be entering the payment app industry only if you have a very solid foundation. If you plan on making your mark with your team of 4 out-of-college programmers working in your grandma’s basement, you should at softer and more niche industries.

 

Banks, Fintech news, Global trends, Hotnews, Remittances

October 7, 2018

1290

TransferWise opens in Hong Kong

By InvestHK,

Leading London-based fintech company TransferWise announced today (6 July 2018) the official launch of its international money transfer platform in Hong Kong, giving it a major foothold in Asia as part of the company’s ongoing international expansion. (more…)

Global trends, Hotnews, Remittances

July 9, 2018

463

Azimo expands its money transfer service from the Nordic countries

by Azimo,

Digital money transfer company Azimo has added 10 new countries to its service for customers in Nordic countries. (more…)

Payment processors/providers/gateways, Remittances

July 6, 2018

547

TransferWise nets first big EU bank customer

France’s second-largest bank, BPCE Groupe, is to become the first in Europe to directly integrate with TransferWise to offer mobile money transfers to its 15 million customers. (more…)

Banks, Global trends, Hotnews, Remittances

June 4, 2018

Walmart launches global money transfer service

Retailer Walmart is pushing further into the financial sector through a service that lets people transfer money from its US stores to 200 countries. (more…)

Hotnews, Remittances

April 4, 2018

649

InstaReM Announces Launch of Money Transfer Operations from India

InstaReM, a Southeast Asia’s digital cross-border money transfer service provider, announced on Monday it has launched outbound money transfer operations from India. This is being done through InstaReM’s partnership with DCB Bank Limited, an Authorised Dealer Category-I Bank, as per the Reserve Bank of India (RBI)’s governing conditions. (more…)

Global trends, Hotnews, InspirAsia, Remittances

April 3, 2018

907

MoneyGram CEO Plans Waves With Ripple

Headlines swirl around the price of bitcoin and its cryptocurrency cousins, around psychological barriers tied to $10,000 thresholds, around raids on suspect operators, around tax rates in South Korea and hacks of crypto exchanges. (more…)

Cryptocurrencies, Fintech news, Global trends, Remittances

January 30, 2018

1050

TransferWise begins private launch of its consumer borderless account and bright green debit card

By Steve O’Hear for Techcrunch

Money transfer company TransferWise has begun a private launch of its “Borderless account” for consumers. It marks the first time the European unicorn has offered a debit card (pictured below), a move that is bound to draw further comparisons with newer fintech upstarts such as Revolut. (more…)

eWallets, Global trends, Hotnews, Remittances

January 9, 2018

960

Azimo Brings Faster Money Transfers to Nigeria

By Julie Munh for Finovate

International remittance service Azimo has sped up money transfers in Nigeria. Just shy of a year after launching its service in the African country, the U.K.-based company announced last week it has enhanced that service. (more…)

Hotnews, Remittances

December 20, 2017

960

WorldRemit Launches Digital Money Transfers to South Korea

Digital money transfer service WorldRemit announced on Sunday it has expanded its remittance service to South Korea. WorldRemit stated that its mobile-first, digital model allows hard-working migrants to send money to South Korea in a few taps, directly from their phones or through the WorldRemit website without the need to visit or stand in line at a bricks and mortar agent. (more…)

Hotnews, Remittances

November 28, 2017

948

Bank Negara approves InstaRem mobile app for easy money transfer

KUALA LUMPUR: InstaRem Malaysia Sdn Bhd, a digital cross-border payments company, sees Malaysia as a large market for its digital remittance services. (more…)

Banks, Deals, Global trends, Hotnews, Remittances

November 28, 2017

700

TransferWise Raises $280 Million in Series E

In a round led by Old Mutual Global Investors and venture capital firm IVP, TransferWise has raised $280 million in new funding. The new capital, which takes the London-based fintech’s total financing to more than $396 million, will be used to help the money transfer innovator grow its services and expand its global presence – particularly in Asia. The Series D also will enable TransferWise to build on its newly-launched service that helps SMEs reduce or even avoid conversion fees by letting them hold money in different currencies. (more…)

Global trends, Hotnews, Remittances

November 7, 2017

Remitly closes in on $115m funding round

US mobile money transfer outfit Remitly says it has agreed to raise up to $115 million in a Series D funding round led by PayU, the fintech investment unit of Naspers. (more…)

Fintech news, Global trends, Remittances

November 1, 2017

1183

Revolut moves into insurance

Revolut users will now be able to insure their mobile phone for as little as £1.00 per week as the innovative fintech launches the first phase of its insurance offering. (more…)

Global trends, Hotnews, Insurance, Remittances

September 28, 2017

1066

Singapore startup Instarem raises $13m to take remittance business away from banks

By  for Tech in Asia

Cross-border remittances amounted to a whopping US$575 billion last year – the bulk of it going to developing countries as migrant family members sent money home or companies sent payments to workers abroad. (more…)

Hotnews, InspirAsia, Remittances

July 4, 2017

1276

Fintech unicorn TransferWise reaches profitability, planning ‘new financial services’

BY Steve O’Hear for Techcrunch.com

What’s more mythical than a unicorn? A unicorn that is profitable. Six years after launch, TransferWise, the London-headquartered international money transfer startup, which was most recently valued at a reported $1.1 billion, has announced that it has finally reached profitability this calendar year and is “cash-generating”. (more…)

Global trends, Influences FinTech, p2p-payments, Remittances

May 25, 2017

1314

TransferWise launches multi-currency business bank accounts

TransferWise is moving further into traditional banking territory, setting up a ‘borderless’ bank account for businesses that need a multi-currency account for trading in overseas markets. (more…)

Global trends, Remittances

May 23, 2017

1490

BBVA brings info and payments to social and messaging networks

BBVA is embedding more deeply with social and messaging networks through a new bot that lets Spanish customers access financial information via Facebook and Telegram, and a tool for making payments from Whatsapp. (more…)

Banks, Deals, eWallets, Fintech news, Global trends, p2p-payments, Remittances

May 19, 2017

1213

World Remit’s US Business is Growing 250% a Year

By CrowdFund Insider

WorldRemit, a digital money transfer platform, says business is booming. (more…)

Remittances

May 19, 2017

1335

Fintech unicorn Transferwise moves into the black

Fintech unicorn Transferwise says the company has reached operational profitability six years after launch. (more…)

eWallets, Fintech news, Global trends, Hotnews, news, p2p-payments, Remittances

May 17, 2017

1631

Pangea Money Transfer arrives in Honduras

Pangea Money Transfer, a remittance app built for the mobile user, has expanded its service into Honduras. With this addition, Pangea’s application is now available in six Latin American countries, including Mexico, Colombia, Guatemala, El Salvador and the Dominican Republic. (more…)

Remittances

May 2, 2017

1153

ItzCash partners with Prabhu Money for Indo-Nepal remittances

ItzCash, India’s largest digital payments company and the leading player in domestic remittances, has further ventured into cross-border remittances through its collaboration with Prabhu Money Transfer India, a leading remittance company in Nepal. (more…)

Cashless, Global trends, InspirAsia, Remittances

May 1, 2017

1083

Airwallex raises $13M led by Tencent to bring its cross-border payment service to Europe

By Jon Russel for TechCrunch

Australia-based cross-border payments startup Airwallex has closed a $13 million Series A round to expand its reach across Asia Pacific and into Europe. The deal was led by Chinese internet giant Tencent — marking its first investment in an Australian startup — with participation from Sequoia China, Mastercard and other undisclosed investors. (more…)

Deals, eWallets, Global trends, Hotnews, Remittances

May 1, 2017

1245

TransferWise opens Asian hub in Singapore

We’re excited to announce that we’re launching TransferWise’s Asia-Pacific hub in Singapore. (more…)

Fintech news, Global trends, Hotnews, InspirAsia, Remittances

April 28, 2017

1122

WorldRemit partners Tigo Money for mobile transfers to El Salvador and Guatemala

Leading digital money transfer service WorldRemit announced today it has partnered with Millicom’s subsidiaries Tigo Money to open up new remittance routes to El Salvador and Guatemala, enabling Salvadorans and Guatemalans abroad to send money transfers instantly to more than one and a half million Tigo Money users in those countries, directly from the WorldRemit app. (more…)

Fintech news, Global trends, Hotnews, p2p-payments, Remittances

April 28, 2017

2056

Walmart launches mobile money sending platform

Three years ago this week, Walmart introduced its groundbreaking money transfer service, Walmart2Walmart Powered by Ria, with the goal of bringing customers dramatically lower costs and a simpler money transfer experience. (more…)

Global trends, Hotnews, p2p-payments, Remittances

April 28, 2017

1206

TransferWise moves into Asia Pacific with opening of regional HQ in Singapore

By Jon Russel for Techcrunch

TransferWise, the billion-dollar valued startup that reduces the cost of cross-border payments, has taken a big step to globalizing its service after it opened an Asia Pacific office in Singapore. (more…)

Global trends, InspirAsia, p2p-payments, Remittances

April 27, 2017

1203

Azimo Adds Payments Via Phone Number To Its App

Azimo, the U.K. money transfer startup that has the backing of Rakuten, is reportedly launching a new feature that enables users to easily send money via the app. (more…)

Fintech news, Global trends, Hotnews, Remittances

April 27, 2017

Western Union Teams Up With Facebook Messenger For Global Money Transfers

By PYMNTS

Score another win for Facebook with Western Union’s latest announcement at the social media giant’s F8 annual developer conference. (more…)

Deals, Fintech news, Global trends, p2p-payments, Remittances

April 20, 2017

1085

Revolut Partners Up With Trussle For Mortgage Broking Service Access

Buying a home can be a long and arduous process whether as first-time home buyers or multi-unit owners. The paperwork alone can be tedious and, at some times, repetitive. (more…)

Remittances

April 19, 2017