The cross border payments market is huge as people across the globe send money back and forth. Samsung Electronics America wants a piece of that $700 billion opportunity and just announced a new service to meet that end.
Dubbed Money Transfer, with the new feature U.S. customers of Samsung Pay can send cross border payments to 47 countries via Samsung’s digital wallet including India, Mexico, China, Philippines and major markets in Africa. Money Transfer will be rolled out to other markets in 2020. The South Korean consumer electronics company is teaming up with Travelex, a unit of UK payment platform Finablr to make this service a reality.
“There’s a huge need for consumers around the world to send money securely,” said Mehul Desai, Finablr CTO. “We want to reduce friction and bring more convenience.” According to Desai one of the big complaints about cross-border payments is the lack of transparency in terms of the fees associated with transferring money. Users don’t always know how much it costs to send money to family or friends outside of their home country.
With Money Transfer all of the fees and exchange rates are included upfront so customers know how much they are paying before they hit send. Desai said the fees will vary depending on the amount and where it’s being sent but can be as low $1.72. He declined to say how high the percentage could be other than its competitive with other industry players. Western Union, the leader in cross-border payments charges roughly 5% on average while fintech startup Remitly charges an average of 1.3%.
Sending money internationally is made easy through Samsung Pay. Customers can use existing debit or credit cards registered with Samsung Pay to send money in most of the major currencies via Finablr’s global network. Recipients can have the money deposited into a bank or can choose to pick it up from a store.
Entering the cross-border payments market is a natural next step for Samsung Pay, which has been enabling digital payments since August of 2015. In order to get an edge over its first-place rival Apple Pay, it has to offer more. According to research firm Auriemma Group, as of last fall Apple Pay represented 77% of mobile wallet transactions. Samsung Pay was a distant second, accounting for 17% of digital payments. Part of the reason is Apple Pay was first to the market and as a result has enjoyed higher adoption rates than its rival.
“Our consumers are global and have friends and family around the world,” said Sang W. Ahn, Vice President & Division Head, Content & Services, Samsung Electronics America in a press release announcing the service. “Money Transfer is a first step in our vision to evolve Samsung Pay into a platform that makes users’ financial lives more convenient.”
In the cross-border payments market, Samsung Pay faces steep competition from the likes of Western Union, Remitly and fintech startups such as TransferWise. Western Union is constantly reinventing itself to ensure it remains relevant in the global money transfer market. It recently announced it’s expanding its real-time global payment services to include transfers from bank accounts and digital wallets in 17 countries. In June it forged an alliance with Visa in which Western Union will use Visa Direct, the real-time push payments platform to speed up money transfers.
Meanwhile, Remitly recently raised $200 million in venture funding, giving it a valuation of close to $1 billion. And Transferwise just launched a debit card in the U.S. that works in multiple currencies at once, enabling people to shop and send money globally.
Despite all that, Samsung and Finablr seem undeterred. They point to Finablr’s platform, international reach and 40 years of cross-border payments expertise, as reasons they will be winners. “Combining our industry-leading network and pioneering technology with Samsung’s leadership in the mobile device market, allows us to innovate at a scale that is unique in the US$127 trillion global cross-border payments market,” said Promoth Manghat, Group Chief Executive Officer at Finablr in prepared remarks. “This partnership advances our mission to meet the evolving needs of financial consumers and further strengthens our position as a partner of choice for global payments and technology companies.”
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A journalist for more than fifteen years, I am a freelance writer reporting on personal finance, entrepreneurship, investments, fintech and technology for a variety of media outlets. What sets me apart from my peers is my ability to take complex topics and explain it to the masses. After years of covering the equities markets as a technology reporter and special contributor to the Wall Street Journal, I embarked on a freelance career providing my readers with invaluable advice on everything from investing to landing a job. With the intersection between personal finance and technology getting blurred, cutting through the fintech noise and getting to the bottom of the story is becoming increasingly important to readers around the globe.