Hugo: Do you think Comparison Websites are becoming increasingly used by Money Transfer Senders?
Olivia: We can see more people are using comparison websites to compare money transfer providers. On finder.com, we officially launched our international money transfer comparison in February 2016 and since then, we’ve seen a 600% increase in the number of people in the US comparing providers.
We also found that there are 3-times more people are searching Google to compare money transfer providers since 2014 in the US.
We think that as more people in the US become more aware of comparison websites and how much they could save, we believe that it’s inevitable more people will use comparison websites before making any money decision.
H: You have been comparing services in Australia for a while and recently in the US and UK, Do you only compare digital services? If a company serves only brick & mortar clients that information doesn’t show up in your comparisons?
O: We generally compare products that are available for people to learn about and apply through the internet. Almost all of the products and providers we compare are available online however, we do compare some that don’t offer an online application, such as some short-term lenders.
H: Is the cheapest Available Option changing frequently? Are the top companies mostly the same day in, day out? What have been the results in the last few months?
O: We analyzed 11 money transfer providers’ exchange rates and fees for the past three months from February 22 to May 25. Generally, the same companies give the best rates day in and day out as transfer rates actually remain relatively stable. Fluctuations between rates rarely ever exceed 1%. This assessment is based-off of looking both at the transfer fee and exchange rate. But we are always onboarding new providers, looking for products that can give better rates, which can change comparisons.
H: How much variation exists between Australia, US and UK? Have you had time to see the differences?
M: From what we can see, generally rates by providers that operate in each country look to be the same. We can’t see any distinct differences between offerings in Australia, UK and USA.
H: Are you comparing only the cost to send? What about the quality of the service, the payment speed? What about the delivery methods?
O: At finder.com we believe that finding the right product is situational as different people have different needs. As a result, for our Money Transfer Awards 2017 research project, we created five categories based on consumer concerns: Best User Experience, Fastest Transfer Speed, Best Rates, Most Trustworthy, Most Convenient. Some fared better for different areas that are more important to some people, so it was great to highlight these features and benefits. The providers that scored best across all categories won Outstanding Product.
H: Did the Awards give you a deeper perception of the market and the experience of the user or more depth into the data of your comparisons?
O: Yes. There are a lot of gaps that are unanswered in the international money transfer market, it is not very transparent in many ways. We wanted to find out if the rates and fees that are advertised by these providers are really offered when it comes to crunch time, that is, when a customer signs up and receives a quote for a particular transfer.
There were so many insights that we didn’t realize from the outset of studying money transfer providers, factors that can only be discovered from user testing and live transfers.
We also noticed distinct differences between these providers – their security and sign up processes, their customer service and their fees are some of the areas that varied dramatically.
H: If your revenue comes from referral fees, what precludes you from moving your visitors to the companies you get more revenue from?
M: At finder.com, our mission is to help the world make better decisions. We’re not owned or affiliated by any banks or providers, we’re privately owned by two Australian tech entrepreneurs and school friends Fred Schebesta and Frank Restuccia, and we genuinely want to help people as our first priority. Our editorial guidelines and our business model are both aligned to achieve an outstanding service and high integrity. We want to put the power into the user’s hands by allowing them to sort, filter and compare products without commercial bias.
H: Do you think companies are looking at your data to better compete or to place themselves in a certain range? Do you have evidence of this?
O: We’ve been very transparent about how we’ve conducted the research and have found that this is a major reason those in the industry are taking notice. We’ve also been asked to speak and write on the subject in order to help those in the cross-border payment industry improve their products. One provider has actually let us know that they’ve adjusted their rates because of our research and plan on incorporate more of our findings into their new rollout.
H: Have companies complained about the results of the awards?
O: The response has been overwhelmingly positive. We’ve had providers adjust their products because of our findings and have also attracted other providers that want to participate in our next research awards project. Because we’ve used accurate methods of collecting and analyzing the research, as well as an external user testing provider – Usertesting.com – our methodology is transparent and has been well received by these providers.
H: Do you think online offerings are creating a digital divide between more financially astute and tech friendly customers getting better deals than the average migrant offline sender?
O: The best online transfer rates generally do beat transfer rates from an agent, bank or offline provider, but even those who are “financially astute” or “tech friendly” aren’t necessarily taking advantage of these better rates. I’ve met bitcoin fanatics at fintech meetups who still use Western Union to send funds back to their family. On the other hand, there are corridor-specific online platforms that get better rates than most brick-and-mortar locations that can become popular within an immigrant community. Pangea, our winner of Best User Experience, is one of these in the Mexico to US corridor. They are mobile-first but are mostly set up for cash pickup in the recipient location.
That said, I do think this pricing disparity is a concern to observe. As many of your readers know, 2.5 billion people live in regions of the world where no banking infrastructure exists. They could not even receive funds from many of the online providers with the best rates as those don’t include cash pickup. However, I’m optimistic about some of the innovations in this space addressing this problem.
H: Do you think Brexit will change some of the results you are seeing? How?
M: Brexit has caused a weakened British Pound against other currencies. This will impact people sending money from the UK as well as those sending to the UK. For those who are sending money to the UK, it will cost them less as other currencies are now stronger when converting to the British Pound. Conversely, when people send money from British Pounds to a different currency, they will lose money on the transaction compared to a year ago.
O: Transfer fees by some providers responded on March 29, by increasing during April following Theresa May’s administration invoked Article 50 pulling the trigger on Brexit. When sending funds from the U.S., we witnessed some providers raising rates on GBP and EUR while dropping them for CNY and INR. However, within two weeks rates returned to their previous levels. Interestingly, we didn’t see the same response to cash pickup transfers. We’ll have to keep an eye on this to see if any ongoing trends occur.
Money transfer comparison sites and finder.com’s Money Transfer Awards
The more I learn about money transfer comparison websites, the more I am fascinated by the results that they provide. And they are getting better and better, and they are each finding a way to present their information and develop their own character. Are they being used by end-users? Who, how? Are they been used by companies to see how the competition is pricing themselves compared to them? How consistent are the best priced companies?
All those questions are probably in your mind. I can’t answer all of them but by the end of your read you’ll probably have a better idea of this new side of this industry.
The pioneering work of REMITTANCE PRICES WORLDWIDE
The Remittance Prices Worldwide (RPW) is a website [1] developed and funded by the World Bank with contributions from the Swiss State Secretariat of Economic Affairs (SECO), the Department for International Development (DFID) and the Japan International Cooperation Agency (JICA). The RPW site now (June 2017) covers 365 “country corridors” including 48 remittance sending countries and 105 receiving countries. The value of the website is not only the price comparison and corridor coverage, but the great reports the team produces:
In the RPW June 2017 quarter report, the key findings were:
Although the site argues that the single most important factor leading to high remittance prices is a lack of transparency in the market and that it is difficult for consumers to compare prices, we have to be honest when we analyze the effect of RPW as an end-user consumer advisory site. I think the most valuable contributions of RPW has been for the industry itself. Regulatory bodies, consumer services groups, government agencies and industry consultants use the data to bring awareness to clients. Some providers have used the data to inform the public, but only if they are favored by the comparisons with competitors.
[1] The website is in 8 languages including Español, Portugues, Français, Italiano. RPW is managed by the World Bank Payment Systems Development Group (PSDG), which is part of the Finance and Markets Global Practice. The Remittance Prices Worldwide team is: Massimo Cirasino, Head of PSDG, Marco Nicolì, Remittances Specialist and RPW Team Leader, Carlo Corazza, Sr. Remittances Specialist, Isaku Endo, Sr. , Alana K. Fook and Emily N. Kaput, Remittances Analysts.
The role of end-user online comparison sites for money transfers
In contrast, at least with online money transfer servicers, end-user comparison sites are bridging this gap between data and consumers. Tech-savvy migrant groups in Europe, United States and Australia are now searching for deals on price comparison websites such as SaveonSend, Monito, and finder.com — to name a few [2]. The impact of cost is, of course, more pronounced when you are sending amounts larger than the average USD 100 to 200 (depending on the country of destination) that migrants send home. As a result, online foreign exchange sites are now competing in the P2P money transfer market while offering worthwhile deals for the B2B Market as well.
Financial service comparison websites have been popular for those seeking the right credit card, personal loan, or mortgage for their needs. Their business model consists of making referral deals with the provider of the services generating revenue streams when the user clicks on the service and completes a transaction.
And now money transfer comparison sites are becoming increasingly popular with online consumers. Not only is it easier to monitor the providers online and have up-to-date information, but the referral process is fast and simple. There’s no need for the consumer to know what type of agreement is done internally between referrer and referee. And if the price comparison site is true and honest, the sender is free to make an informed and independent choice all while encouraging providers to compete for lower rates, better usability, and convenience.
As this kind of comparison is much more difficult to apply to brick-and-mortar retailers, the cheaper processes are indeed online and the digital divide in the industry is accentuated.
[2] The blogs on SaveonSend are worth reading for anyone in the industry, I have said it many times before. Yakov Kofner analysis perspectives are full of information. Monito’s independent review of 465 money transfer operators and banks is also full of information as well as the blogs and interviews. Check also the video reviews.
Finder.com tests online money transfer providers for Money Transfer Awards
Australian personal finance comparison website finder.com, established in Australia in 2008, opened shop in the US and the UK as part of their international expansion. In the US they launched the finder.com Money Transfer Awards which caught my attention as we had been busy with the 2017 RemTECH Awards that we announced last week, on June 15th at the UN.
I spoke with Olivia Chow, US Consumer Trends Expert and Lead Researcher of the awards, and later with Michelle Hutchison, Global Head of Communications and Money Expert for finder.com based in Australia. I have to admit that I was very skeptical at first but soon was impressed by the thorough job they did evaluating the online money transfer providers. They considered not only price, but also convenience, trust, user experience, and speed. You can check the money transfer award results at the end of the interview.
My first talk with them led to the series of questions below, which Olivia and Michelle have taken the time to answer. I hope to have both at our next IMTC so that we can have a round table about the subject and give all conference participants the opportunity to listen to them and ask questions. There, I plan to dive into the results as part of the IMTC WORLD 2017’s agenda preparation.
Hugo: Do you think Comparison Websites are becoming increasingly used by Money Transfer Senders?
Olivia: We can see more people are using comparison websites to compare money transfer providers. On finder.com, we officially launched our international money transfer comparison in February 2016 and since then, we’ve seen a 600% increase in the number of people in the US comparing providers.
We also found that there are 3-times more people are searching Google to compare money transfer providers since 2014 in the US.
We think that as more people in the US become more aware of comparison websites and how much they could save, we believe that it’s inevitable more people will use comparison websites before making any money decision.
H: You have been comparing services in Australia for a while and recently in the US and UK, Do you only compare digital services? If a company serves only brick & mortar clients that information doesn’t show up in your comparisons?
O: We generally compare products that are available for people to learn about and apply through the internet. Almost all of the products and providers we compare are available online however, we do compare some that don’t offer an online application, such as some short-term lenders.
H: Is the cheapest Available Option changing frequently? Are the top companies mostly the same day in, day out? What have been the results in the last few months?
O: We analyzed 11 money transfer providers’ exchange rates and fees for the past three months from February 22 to May 25. Generally, the same companies give the best rates day in and day out as transfer rates actually remain relatively stable. Fluctuations between rates rarely ever exceed 1%. This assessment is based-off of looking both at the transfer fee and exchange rate. But we are always onboarding new providers, looking for products that can give better rates, which can change comparisons.
H: How much variation exists between Australia, US and UK? Have you had time to see the differences?
M: From what we can see, generally rates by providers that operate in each country look to be the same. We can’t see any distinct differences between offerings in Australia, UK and USA.
H: Are you comparing only the cost to send? What about the quality of the service, the payment speed? What about the delivery methods?
O: At finder.com we believe that finding the right product is situational as different people have different needs. As a result, for our Money Transfer Awards 2017 research project, we created five categories based on consumer concerns: Best User Experience, Fastest Transfer Speed, Best Rates, Most Trustworthy, Most Convenient. Some fared better for different areas that are more important to some people, so it was great to highlight these features and benefits. The providers that scored best across all categories won Outstanding Product.
H: Did the Awards give you a deeper perception of the market and the experience of the user or more depth into the data of your comparisons?
O: Yes. There are a lot of gaps that are unanswered in the international money transfer market, it is not very transparent in many ways. We wanted to find out if the rates and fees that are advertised by these providers are really offered when it comes to crunch time, that is, when a customer signs up and receives a quote for a particular transfer.
There were so many insights that we didn’t realize from the outset of studying money transfer providers, factors that can only be discovered from user testing and live transfers.
We also noticed distinct differences between these providers – their security and sign up processes, their customer service and their fees are some of the areas that varied dramatically.
H: If your revenue comes from referral fees, what precludes you from moving your visitors to the companies you get more revenue from?
M: At finder.com, our mission is to help the world make better decisions. We’re not owned or affiliated by any banks or providers, we’re privately owned by two Australian tech entrepreneurs and school friends Fred Schebesta and Frank Restuccia, and we genuinely want to help people as our first priority. Our editorial guidelines and our business model are both aligned to achieve an outstanding service and high integrity. We want to put the power into the user’s hands by allowing them to sort, filter and compare products without commercial bias.
H: Do you think companies are looking at your data to better compete or to place themselves in a certain range? Do you have evidence of this?
O: We’ve been very transparent about how we’ve conducted the research and have found that this is a major reason those in the industry are taking notice. We’ve also been asked to speak and write on the subject in order to help those in the cross-border payment industry improve their products. One provider has actually let us know that they’ve adjusted their rates because of our research and plan on incorporate more of our findings into their new rollout.
H: Have companies complained about the results of the awards?
O: The response has been overwhelmingly positive. We’ve had providers adjust their products because of our findings and have also attracted other providers that want to participate in our next research awards project. Because we’ve used accurate methods of collecting and analyzing the research, as well as an external user testing provider – Usertesting.com – our methodology is transparent and has been well received by these providers.
H: Do you think online offerings are creating a digital divide between more financially astute and tech friendly customers getting better deals than the average migrant offline sender?
O: The best online transfer rates generally do beat transfer rates from an agent, bank or offline provider, but even those who are “financially astute” or “tech friendly” aren’t necessarily taking advantage of these better rates. I’ve met bitcoin fanatics at fintech meetups who still use Western Union to send funds back to their family. On the other hand, there are corridor-specific online platforms that get better rates than most brick-and-mortar locations that can become popular within an immigrant community. Pangea, our winner of Best User Experience, is one of these in the Mexico to US corridor. They are mobile-first but are mostly set up for cash pickup in the recipient location.
That said, I do think this pricing disparity is a concern to observe. As many of your readers know, 2.5 billion people live in regions of the world where no banking infrastructure exists. They could not even receive funds from many of the online providers with the best rates as those don’t include cash pickup. However, I’m optimistic about some of the innovations in this space addressing this problem.
H: Do you think Brexit will change some of the results you are seeing? How?
M: Brexit has caused a weakened British Pound against other currencies. This will impact people sending money from the UK as well as those sending to the UK. For those who are sending money to the UK, it will cost them less as other currencies are now stronger when converting to the British Pound. Conversely, when people send money from British Pounds to a different currency, they will lose money on the transaction compared to a year ago.
O: Transfer fees by some providers responded on March 29, by increasing during April following Theresa May’s administration invoked Article 50 pulling the trigger on Brexit. When sending funds from the U.S., we witnessed some providers raising rates on GBP and EUR while dropping them for CNY and INR. However, within two weeks rates returned to their previous levels. Interestingly, we didn’t see the same response to cash pickup transfers. We’ll have to keep an eye on this to see if any ongoing trends occur.
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