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Within the last few years, a number of startups looking to challenge the $400 billion-plus global remittance market have emerged. In an effort to reduce the fees incurred on migrant workers and people in developing countries (which averaged about 8 percent in 2014), young companies such as Currencyfair, BitPesa, and WorldRemit host digital peer-to-peer payments at relatively little to no cost.
But WireCash is taking a different approach to effecting change within the industry: work directly with smaller, pre-existing money-transfer companies to offer users lower fees and more sending options. Using these partnerships, WireCash gives users a new way to transmit funds from the U.S. to recipients abroad.
WireCash partners primarily with companies who previously operated strictly offline. Senders can compare and choose among these companies – which include Girosol, Pontual, and Prabhu – when preparing a remittance for processing.
Vice president of business development Logan Lemberger noted that offline companies represent the vast majority of the remittance market, which is most visibly represented by a small fraction of digital giants including Xoom, MoneyGram, and Western Union.
“Offline money transfer companies in many cases are the preferred consumer choice to specific destination countries but prior to WireCash’s technology, most were excluded from the online market. Essentially, the companies offered online through WireCash cannot be found online anywhere else,” Lemberger said.
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The WireCash staff. From left: Logan Lemberger, Micah Blu, Jonathan Cooper (Co-Founder), Ran Grushkowsky (Co-Founder), Roberto Ricardo.
The startup, Lemberger contends, offers these companies a number of advantages: it modernizes them with a digital presence without requiring them to invest much in technology or in adapting to an online business model. Furthermore, these remittance services gain customers who might not have found them otherwise.
Consumers also benefit under this model, Lemberger said. Because WireCash allows senders to compare multiple money-transfer companies, it allows them to examine different prices and exchange rates, helping them make a more informed decision about the best way to send. Furthermore, listing multiple services generates competition, prompting them to offer affordable prices and/or a higher quality of service. Finally, he explained, “our technology allows money transfer companies to offer more competitive pricing, which can be passed on to consumers.”
“A little bit of savings across many transactions over time certainly adds up and contributes to greater disposable income to primarily low-income immigrant populations who greatly benefit,” Lemberger said.
He added that the startup, which currently partners with five remittance companies and processes transactions from the U.S. to over 60 countries, is building and refining its comparison tools and is in talks about how to “contribute to local communities where both our consumers come from, and send to.”
“We are excited about the positive impact we can inspire within bottom-of-pyramid communities in the U.S. and around the world,” Lemberger continued. “We hope that at a time when immigrant communities are adopting digital technologies and online commerce at faster rates than ever that online money remittance can aid in the financial literacy and inclusion of key demographics.”
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