MNOs are not being aggressive enough in the mobile money market, leaving ‘significant’ revenues and profits to MVNOs, TransferTo’s CEO has claimed.
Speaking to Mobile, TransferTo CEO and co-founder, Eric Barbier said it has the solution for mobile operators, explaining its remittance platform gives MNOs a simple way into the market.
The company connects financial institutions with mobile companies, enabling the latter to deliver financial services on a global basis via text, apps and the website.
The platform allows the transfer of prepaid airtime or mobile money overseas without the need of a bank account. The company explained that this is to cater to the growing market of customers who prefer to use a smartphone to send money abroad.
MVNO market share
Barbier described this market as ‘lucrative’, but explained that so far mobile operators have largely left this niche market to MVNOs. However, he said European operators are now starting to see opportunities in what TransferTo claims is a $3bn market.
He said: ‘A lot of the operators in the UK have given this market to the MVNOs. As far as I understand, MNOs are not being aggressive, and we have seen this in a few markets in Europe where they prefer to leave MVNOs to target this space.
‘It’s a very lucrative market, you need to have your pricing done right as it is price sensitive. I believe it was a bit too complex for mobile operators as you need to segment your customer base. I am not too sure why they left the market for the MVNOs, I think Orange in France and a few companies in Spain are trying to get back in, but it is a very good market as the ARPU is very high.
‘In emerging markets the telcos have really embraced mobile financial services, and it is becoming more and more important, so the revenues and profits they are making are becoming significant.’
Mobile man power
TransferTo currently works with Lebara in the UK, with Barbier explaining that the MVNO is very focused on targeting this segment of the market. He believes that up until now many MNOs have not had the manpower to embrace financial services fully, but that many are now using TransferTo’s platform to simplify the process.
‘On the one hand you have many financial institutions, and on the other hand you have hundreds of mobile operators, and there is no way for each of the players to interconnect bilaterally,’ he said. ‘We have the ability to bring transactions from abroad – most are very good domestically but when they have to interact globally they don’t have the manpower.
‘In the UK we work with Lebara because it is targeting this area of the market. We are bringing mobile operators revenues and transactions from countries it could not otherwise get. We are bringing the ability for financial institutions to send money in real time to mobile phones in the developed world – it is less relevant to them except for people who are already focused on the immigrant market, such as Lebara – we provide transaction value from the money being sent. We don’t work with Lyca yet.’
Barbier said that while the company works with consumer-facing brands, TransferTo will remain a b2b focused business to claim a slice of ‘300 million mobile money calls being made today’, expressing no ambition to compete with the big brands.
He said: ‘Consumers are not our thing, we don’t believe that adding a dual brand would make much sense. Consumers trust Western Union and PayPal, and we believe that b2c relationship is between the big brands, that is not our business and we don’t want to compete. We want to have access to the 300 million mobile money calls being made today and we want to provide the largest mobile money network access in the world.’