Global Money Transfers: Getting The Formula Right When High-Tech Meets High-Touch

March 22, 2005


San Francisco, CA, USA March 22, 2005

Global Money Transfers

Celent shows that banks and new entrants alike are emerging with profitable business models aimed at taking back market share from traditional money transfer agents. By 2007, Celent estimates that more than 40 percent of foreign-born households will bank online, and at least half this number will use an online or card service to send remittances.

In a new report, , Celent provides an assessment of the current remittance market landscape. The report examines a new paradigm emerging in the marketplace whereby "sponsor banks" are teaming up with card processors and distribution companies to overcome traditional barriers to entry: large origination and distribution networks, scalable technology platforms, and stringent compliance issues. The emerging models come from both public and private companies that will take a best-of -breed approach to money transfer, partnering with specific banks, processors, and distributors to ensure that critical requirements of their business are met. ATM card/POS terminal processing, Office of Foreign Asset Control (OFAC) guidelines, stored value card compliance, and agent distribution can all be handled by a set of partners. This will allow entrants to conduct large-scale competition without highly capital-intensive investments.

Celent finds that while there will be downward pressure on pricing due through increased competition and bundling of products and services, the money transfer market will remain profitable due to its sheer size and fragmentation. The remittance market should grow from US$256 billion in 2005 to US$281 billion in 2006 while flows from unlicensed entities continue to decrease due to increased regulatory scrutiny.

"This year, we will see entrants with a combination of business processes, local distribution, and new technology that should finally bridge the "high-tech, high-touch" divide in the marketplace and win with the right formula," comments Dan Schatt, a senior analyst in Celent痴 banking group and author of the report.

The report finds that there is a growing divergence of opinion in the US marketplace over how best to reach remitters. The high-tech camp emphasizes technology and price as a primary consumer decision factor, while institutions in the high-touch camp emphasize ongoing personalized contact and rely primarily on walk-in traffic to their agent locations.

The 43-page report contains 18 figures and three tables. A is available online.

of Celent Communications' Retail Banking and Wholesale Banking research services can download the report electronically by clicking on the icon to the left.  Non-members should contact for more information.


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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

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San Francisco, CA, USA March 22,  2005

Global Money Transfers

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