There are a lot of players jockeying for this market: banks, Visa, MasterCard, WU, cell operators, etc.
I don't think there will be a single global winner. IMHO, the market will become more fragmented before it becomes more unified. E.g. in Eastern Europe almost everything is done via bank transfer - I think they inherited this from Western Europe. In US doing a bank transfer is huge pain in the ass and people use checks. Almost no one uses checks in Eastern Europe, but almost all payments of bills is done over bank transfer.
On the other hand, things are different in Africa, Asia and Latin America. In some places already the payments by transferring mobile operator minutes is common. In some places, banks, Visa, MC are preferred solutions.
The advantage of WU is that it has strong presence in US as originating country. I.e. if I need to send money to Lithuania, I have only a choice of WU or US banks who are pain in the neck to do balance transfers. (This has started to change somewhat since they have smelt the opportunity of transfers to Mexico. Still overall the experience is horrible compared to Euro standards where you can do balance transfer almost anywhere with a push of a button.) I cannot use Lithuanian-Swedish-Finnish banks, since they don't have presence in US. I cannot use phone operators, since they don't have presence in US. Visa and MC has not rolled out a service yet either. I think Paypal is starting to push something, but they rely on a bank as an endpoint, which becomes a huge hassle. You have 3 institutions: originating bank -> Paypal -> receiving bank. And they have issues with payment cancellations.
Long term it is going to be a bloody area although WU can somewhat rely on continuous apathy of US banks to provide an easy solution. The question is whether Visa/MC/Amex will be apathetic as well. I don't think WU has advantage or foothold when US is not an originating country.
I hold position in UEPS partially as a play in this area. |
